Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

GREATER LONDON COUNCIL (GENERAL POWERS) BILL

Order for consideration read.

Bill to be considered upon Tuesday next.

Oral Answers to Questions — TRANSPORT

Road Accidents

Mr. Ashley: asked the Secretary of State for Transport what further steps he proposes to take to reduce the number of road accidents.

The Under-Secretary of State for Transport (Mr. John Horam): The Government have a continuing programme of measures to reduce road accidents. As my right hon. Friend said in answer to a Question by my hon. Friend the Member for Swansea, East, (Mr. Anderson) on 15th March, he is arranging a major conference on road safety this summer.

Mr. Ashley: As there is now no doubt that well over 1,000 lives would be saved and well over 10,000 people could avoid serious disablement every year, and that there are diminishing returns on increased expenditure or methods of persuasion, why does my hon. Friend not bring forward a Bill to make the wearing of seat belts compulsory, in order to end, once and for all, the massacre and maiming of innocents?

Mr. Horam: I very much regret that it has not been possible to introduce a

Bill in this Session—and, of course, I cannot say anything about next Session. However, my right hon. Friend has said that we are convinced that legislation will ultimately be forthcoming to make the wearing of seat belts compulsory. In the meantime, we can do a great deal by voluntary persuasion. My hon. Friend will know that the wearing of seat belts increased from 17 per cent. to 31 per cent. as a result of successive advertising campaigns, and we shall do more of that.

Mr. Paul Dean: Does the hon. Gentleman accept that one of the best ways of reducing road accidents would be to step up the road maintenance programme? Will he give a positive response to the pleas of Avon County Council and many others about the bad state of our roads and recognise that the present neglect is bound to lead to more loss of life and is penny wise and pound foolish?

Mr. Horam: I do not accept for one minute that there is neglect. I certainly accept that maintenance is an important part of any continuing programme of road safety, together with care for driving conditions and road surfaces in general. The hon. Gentleman may be aware that we instituted a national survey of road maintenance conditions in 1976, and this will ensure that objective evidence is available about the condition of roads.

Mr. Anderson: As the effects of the breathalyser Act become less pronounced, there is a need to go beyond advertising campaigns and to step up the campaign against driving while under the influence of alcohol. Why has nothing been done about the recommendations of the Blennerhassett Committee?

Mr. Horam: My hon. Friend will be aware that legislation would be necessary to bring in all the measures recommended by the Blennerhassett Committee, and that has not been possible this Session. We are doing all that we can to introduce those parts of the recommendations that are not necessarily subject to legislation. For example, we shall have a major publicity campaign this year on drinking and driving.

Tachographs

Sir J. Langford-Holt: asked the Secretary of State for Transport whether he


is satisfied with the implementation of European Economic Community regulations on tachographs to date; and whether he will make a statement.

The Secretary of State for Transport (Mr. William Rodgers): Together with my colleagues, I am still considering my response to the Commission's recent reasoned opinion on this.

Sir J. Langford-Holt: When the Government have to start enforcing the regulations on 30th June this year, what will the right hon. Gentleman do to enable operators who have installed tachographs to use them?

Mr. Rodgers: The hon. Gentleman is confusing two aspects of Community policy. He referred to the alternative of using a tachograph instead of having two drivers in articulated vehicles for distances of more than 450 kilometres. I have made clear that there will be no enforcement until the end of the year because of the need for a running-in period. The larger issue of tachographs is a separate matter.

Mr. John Evans: Is it not time that my right hon. Friend informed the EEC Commissioners that forcing Britain, an island country, to adopt tachographs for domestic road transport is unnecessary harmonisation for harmonisation's sake? Will he therefore inform the Commissioners that he will not accept their legislation on tachographs for domestic transport?

Mr. Rodgers: I think that our partners in the Community fully understand the point made by my hon. Friend, that there seems no good reason why tachographs should be used domestically. Nevertheless, there are procedures to be gone through and we are due now to respond to the reasoned opinion which the Commission has put to us in the light of our failure to implement tachographs.

Mr. Fry: Surely the Secretary of State recognises that the Government will have to take action at some time to help hauliers who want to operate legally, with regard to the new distance limits, with tachographs fitted in their cabs. Surely it is time that he started discussions with the industry and the unions concerned. Otherwise, there will be continued aggravation and only increased cost for freight movement.

Mr. Rodgers: There is no problem about using a tachograph if anybody wishes to do so. As the House knows, they are used on international journeys, and voluntary agreements can be reached for their use at home. I am very happy to see voluntary agreements. The whole question of tachographs, quite apart from our legal obligations, is one about which union and management can talk together.

Public Transport

Mr. Hooley: asked the Secretary of State for Transport what was the total of: (a) capital, and (b) revenue support by Central Government for public transport in 1977; and what are the estimated figures for 1978.

Mr. William Rodgers: In 1977, £50 million and £404 million respectively. The equivalent figures for 1978 are expected to be £62 million and £484 million. These figures take no account of rate support grant and transport supplementary grant, as these are block grants and cannot be attributed to individual items of expenditure.

Mr. Hooley: Does my right hon. Friend agree that we have probably reached a stage in public transport policy at which revenue subsidies may be very much more important than subsidies for ambitious capital schemes? Will bear it in mind in calculating the overall subsidy to public transport in future departmental estimates?

Mr. Rodgers: Yes. I think that my my hon. Friend reflects the policy decision that was embodied in the transport policy White Paper published last June and elaborated on, in part, in the two White Papers that I published yesterday. It is clearly the case that support for public transport must have priority.

Mr. Thorne: In regard to forward planning for transport, is the Secretary of State prepared to consider the Lucas Aerospace shop stewards' corporate plan, which includes provision for traffic systems which may assist us on transport generally?

Mr. Rodgers: I am not familar with the details of the plan, but I shall be very happy to consider it if my hon. Friend will let me see it, because he is


quite right to make the point that effective schemes of traffic management are very relevant to the solution of transport problems.

Mr. Ridsdale: If the Minister agrees that revenue is important, will he see that help is given to bring in a national concessionary fares scheme?

Mr. Rodgers: We have discussed the matter many times in the past. I was very glad to be able to issue a circular lately which made clear my view that there should be, as a minimum, half concessionary fares for all concerned throughout the country. I hope that those recalcitrant local authorities will now come into line.

British Railways

Mr. Forman: asked the Secretary of State for Transport when he next plans to meet the Chairman of the British Railways Board.

Mr. William Rodgers: The week after next.

Mr. Forman: When the Secretary of State meets the Chairman of British Rail, will he encourage him to redouble his efforts to increase British Rail's productivity and to stick to the target of 40,000 manning reductions by 1981, so that my hard-pressed constituents and many others throughout the country will have some prospect of alleviation on fares?

Mr. Rodgers: I think that the chairman is quite clear in his mind that the strong view of the House is that we want a cost-effective railway. Progress has been made in that direction in a very satisfactory manner. Obviously, this involves manpower questions, but, as the hon. Gentleman and the House know, there has been considerable progress on the railways towards higher productivity. I am sure that that momentum will be maintained.

Mr. Stoddart: May I draw my right hon. Friend's attention to the good return on the investment in the high-speed train on the Western Region? Does he agree that it is in the interests of railway transport and the economy to invest in high technology on the railways? Does he realise that we have every facility and the skills and staff in Swindon to do that?

Mr. Rodgers: My hon. Friend makes an important point. The high-speed train has been a great success. I think that there will be a general welcome for its introduction on the line from London through Newcastle to Edinburgh on 8th May.

Mr. Geraint Howells: I am sure that the Minister is aware that one cannot travel from North to South Wales on British Rail because all the lines have been closed. Will he give an assurance to the people of Wales that the main line in Mid-Wales between Shrewsbury and Aberystwyth will not be closed? If this line is closed, it will be very difficult to entice industrialists to West Wales.

Mr. Rodgers: I am glad to say that no proposals of that kind are in front of me.

Mr. Groeott: Will my right hon. Friend raise with the chairman the BR costs proposals to upgrade freight lines for passenger transport? Will he encourage him to discuss with Staffordshire County Council proposals to upgrade the Rugeley-Walsall railway line and also the Lichfield-Walsall railway line?

Mr. Rodgers: The question of railway costing and how we attribute cost is familiar to the House and is being pursued in Committee on the Transport Bill at present. I am glad to know that in many cases there is close co-operation between British Railways and the metropolitan counties. There is a future in reviving some of the lines which have not carried much, if any, passenger traffic in recent years.

Mr. Norman Fowler: Is the Secretary of State aware that the Price Commission's report found that British Rail had discriminated unfairly against commuters travelling into London by charging them above-average fare increases?
Will he tell the chairman that commuters from the South-East should not be regarded as a captive market and that further discrimination in fares policy could not be justified?

Mr. Rodgers: I am sure that the chairman is aware of the general concern in the House and elsewhere about commuter fares in the London area. His problem is to balance an improvement in those services and the need to keep increases


in fares down against the necessity which the House imposes upon him to keep within his budget. He has noted what the Price Commission has said, and the Government will be giving their response to the Price Commission's report very shortly.

Road Haulage (Licensing)

Mr. Spriggs: asked the Secretary of State for Transport when he expects to receive the report of the committee of inquiry into operators' licensing.

Mr. Horam: I understand that the committee hopes to present its report by late summer.

Mr. Spriggs: Bearing in mind the Foster Committee's obligation to work within the Government's policy of fair competition in the freight market, will my hon. Friend take other steps to assist fair competition? In particular, will he bring forward the recommendations for vehicle taxation at an early date so that we shall see the railway freight deficit disappear at the same time?

Mr. Horam: I understand my hon. Friend's concern that there should be fair competition between road and rail, and we are doing all that we can to ensure that. However, the precise timing of any changes in vehicle excise duty on lorries, for example, is partly a matter for the Chancellor of the Exchequer as well as for my right hon. Friend. We will have to wait and see whether, in successive Budgets, anything is done about that.

M63 (Cheadle Heath-Portwood)

Mr. Andrew F. Bennett: asked the Secretary of State for Transport when he now expects to receive the report of the inspector into the public inquiry into the proposed M63 motorway from Cheadle Heath to Portwood, Stockport.

Mr. Horam: Fairly shortly.

Mr. Bennett: I thank the Minister for the reply. Will he make sure that "fairly shortly" is within a matter of days rather than months? Will he ensure that his Department processes the inspector's report quickly, in view of the overwhelming case that was made out for this short piece of road at the inquiry in Stockport? Will he see that construction starts before the end of the year, providing jobs in the

Stockport area as well as a much-needed road?

Mr. Horam: I am glad to hear that my hon. Friend is wholeheartedly in favour of this road. It is nice to have a road for which there is such tremendous support in the community as well as from himself. There will be no delay on our part in processing the inspector's report and coming to our conclusions about it. If the statutory processes and the remaining procedures are carried out reasonably expeditiously, we should be able to talk about opening the road in the early 1980s.

A1 (Darrington Flyover)

Dr. Edmund Marshall: asked the Secretary of State for Transport whether he will now announce his decision in respect of the scheme to construct a flyover at Darrington on the Al trunk road.

Mr. Horam: I am glad to be able to tell my hon. Friend, in view of his long campaign for this improvement, that we have now authorised the preparation of tender documents for construction of the Darrington flyover.

Dr. Marshall: On behalf of the many hundreds of my constituents who will greatly benefit from the scheme, may I thank my hon. Friend for his very good news? Will he give an indication of when construction of the flyover will begin?

Mr. Horam: I hope that it will be possible to start work on the flyover by the end of this year and that it will then take about two years to construct.

Association of County Councils

Mr. Sainsbury: asked the Secretary of State for Transport when he next plans to meet the Chairman of the Association of County Councils.

Mr. William Rodgers: I have no present plans to meet her.

Mr. Sainsbury: The Question is Number 9 on my Order Paper, Mr. Speaker. Would it not be a good idea for the Secretary of State to meet the Chairman of the County Councils Association so that he could reassure her that the Government accept that it is for local government to determine which parts of transport expenditure should have


priority in the light of local needs? He could also assure her that the amount of transport supplementary grant given to any authority is in no way dependent on that authority handing out the money in conformity with what might be central Government policy.

Mr. Rodgers: I do not think that I can wholly accept the hon. Gentleman's rendering of this difficult issue and the balance between national policy and local option. In so far as I made some firm decisions about transport supplementary grant last autumn, however, which gave a plain priority to those counties which supported their buses, I have no regrets.

Mr. Ron Thomas: May I appeal to my right hon. Friend to meet the Chairman of the Association of County Councils? In my constituency and in the county of Avon generally there is considerable concern about the transport of dangerous chemicals and other substances. Will my right hon. Friend give an assurance that he will try to ensure that more of these substances go by rail, or that he will introduce regulations to ensure that the vehicles concerned are properly maintained? Will he also give the police authority to stop vehicles which do not meet the regulations that he introduces?

Mr. Rodgers: I should explain that I am very happy to meet the chairman of the association, and that I meet her from time to time. This, however, is not one of the issues that she has raised with me lately. My hon. Friend is right to draw attention to some of the dangers of the carriage of goods by road, and I should like an increasing proportion of all kinds of freight to go by rail. I shall certainly look into the particular problems that he has mentioned.

Mr. Temple-Morris: I welcome the greater stability in the trunk road programme, but will the Secretary of State acknowledge the importance of county councils in the roads programme generally? Since many of the county councils carrying most of the responsibility for roads have been grievously squeezed by cuts in rate support grant, will the right hon. Gentleman give an undertaking that a greater share of the roads budget will be made over to those county councils?

Mr. Rodgers: There is a total allocation for spending on transport which is set out annually in the public expenditure White Paper and was set out in the White Paper on transport policy last June. Within that total for roads construction and maintenance, I am prepared to consider the need for flexibility. However, I must make it absolutely clear that capital works on building new roads must be balanced with proper measures of support for our buses.

National Freight Corporation

Mr. Mudd: asked the Secretary of State for Transport when he next plans to meet the Chairman of the National Freight Corporation.

Mr Trotter: asked the Secretary of State for Transport when he next plans to meet the Chairman of the National Freight Corporation.

Mr. William Rodgers: Shortly.

Mr. Mudd: When the right hon. Gentleman next meets the chairman, will he ask him what justification there was for the January management meeting of British Road Services to be held in Las Palmas, with wives in attendance, rather than in London, as is customary? Will he ask, too, in what way that was benefiting the overall financial structure of British Road Services?

Mr. Rodgers: I shall certainly ask the chairman that question, because I do not know the answer.

Mr. Temple-Morris: Does the Secretary of State agree that the considerable achievements of the National Freight Corporation are due mainly to its commercially aggressive—Las Palmas or no Las Palmas—private-enterprise style of management? Does he therefore agree that there is a considerable case for at least an interest in the NFC being passed back to the private sector so that the money that then becomes available can be used for something more useful than nationalisation, namely, hospitals and schools?

Mr. Rodgers: No. If the hon. Gentleman is right in his interesting but somewhat circuitous analysis of the success of the NFC, the logic is that it should be allowed to expand into a larger public sector.

Mr. Ronald Atkins: If we are to follow the private sector in this regard as well, are we to have more management of British industry from abroad?

Mr. Rodgers: I could not be sure, but our public sector industries should certainly recruit the best management they can, and I am glad to pay tribute to the high quality of management in the NFC and elsewhere.

Vehicle Excise Duty

Mr. Jessel: asked the Secretary of State for Transport what proportion of cars using the roads he estimates to be unlicensed.

Mr. Horam: The results of a new survey will be available shortly. The last survey, in 1971, suggested a figure of 5 per cent. evasion of vehicle excise duty.

Mr. Jessel: Why cannot the Minister tell us the figures now? He has had the result of the survey for several weeks. Surely, even if the figure is still as low as 5 per cent., it means that one car in 20 using the roads is unlicensed, with a loss of £30 million or £40 million of revenue a year. That is grossly unfair to the majority of law-abiding motorists who pay the £50 road tax. What will the Government do about this?

Mr. Horam: I have not had the survey yet, so I cannot give the hon. Gentleman the figures. I shall make the figures available when I get the full results of the survey. I have had only a preliminary indication so far of what the figures might be.

Mr. Jessel: What is that?

Mr. Horam: I think that they may well amount to slightly more than 5 per cent., but I stress that the figures are only preliminary. I said on 7th February that a campaign of second reminders was being carried out to ensure that people paid their vehicle excise duty. We shall certainly look at the effectiveness of that as well as the survey.

Mr. Rooker: Is not the obvious answer to this problem to scrap the system of taxation? My hon. Friend is pussyfooting around with campaigns. Since the revenue is not spent on the roads anyway, the real answer surely is to scrap the system and put the cost on petrol—

Mr. Speaker: Order. The hon. Gentleman is not here to give answers, but to ask questions.

Mr. Rooker: I was asking a question, Mr. Speaker.

Mr. Speaker: The hon. Gentleman was giving an answer.

Mr. Horam: I think that my hon. Friend asked a very relevant question, but it is for my right hon. Friend the Chancellor of the Exchequer, not for me, to answer it.

Mr. Michael McNair-Wilson: What thought has the Minister given to increasing the duties of traffic wardens to empower them to act aginst licence evaders?

Mr. Horam: That is a sensible suggestion, which we have explored, but there are problems regarding Civil Service recruitment and the need to keep down the number of civil servants.

Mr. Raphael Tuck: If we are to have a system of licensing, why not give it teeth? Why not increase the penalties, with mandatory disqualification for one year where a motorist goes for more than four weeks without a licence?

Mr. Horam: I do not know what the House would think of that, but personally I think it might be a touch too Draconian.

Mr. Norman Fowler: Is not my hon. Friend the Member for Newbury (Mr McNair-Wilson) correct? Is the Minister aware that because of Government policy there are now fewer than 1,500 traffic wardens in London, when the Commissioner puts the need at 4,000? Given that the Government are quite obviously now losing millions of pounds a year, does he not agree that there is an overwhelming case for strengthening the traffic warden system?

Mr. Horam: I am glad to hear that the hon. Gentleman is in favour of increasing the number of public employees. This is yet another area where what the Conservatives say on one aspect of public policy conflicts with what they are saying generally. However, I shall look at all reasonable suggestions for saving public money in this area. Clearly, people who pay their excise duty in the lawful way, as the vast majority do, have the right to feel that the rest of the


revenue should be collected as expeditiously as possible.

Mr. Sainsbury: On a point of order, Mr. Speaker. It will be of assistance to hon. Members if they are aware that there seem to be two versions of the Order Paper in circulation, in which Questions are differently numbered.

Mr. Speaker: I am afraid that we are working under exceptional conditions. The hon. Member for Hove (Mr. Sainsbury) has the Old Testament version, and I am working from the New Testament.

National Bus Company

Mr. Goodlad: asked the Secretary of State for Transport when he next plans to meet the Chairman of the National Bus Company.

Mr. George Rodgers: asked the Secretary of State for Transport when next he expects to meet the Chairman of the National Bus Company.

Mr. William Rodgers: Later today.

Mr. Goodlad: In view of the proposals in the Transport Bill to transfer certain powers of responsibility to the counties, will the right hon. Gentleman discuss with the Chairman of the National Bus Company the possible advantages of opening to tender subsidised bus routes that at present are operated by the National Bus Company or its subsidiaries?

Mr. William Rodgers: The question that the hon. Gentleman has raised goes far beyond the responsibilities of the Chairman of the National Bus Company, whose job it is to run the company according to the broad statutory rules laid down by the House. As the hon. Gentleman may know, we have been discussing in Committee the whole question of improving our public services in rural areas. I see no prospect of the hon. Gentleman's solution producing an improvement.

Mr. George Rodgers: When my right hon. Friend meets the Chairman of the National Bus Company, will he refer to the enormous community investment in the bus and truck division of British Leyland and to the public support given to the bus operators, and remind him that

in this circumstance it is imperative that it buys British at every opportunity?

Mr. William Rodgers: Yes, I fully appreciate the important point that my hon. Friend makes. I think that it is in the mind of the Chairman of the National Bus Company, but I shall remind him of it.

Mr. Farr: When the right hon. Gentleman next meets the Chairman of the National Bus Company, will he ask him to explain why he has produced no concessionary fare scheme for pensioners and others travelling on his buses, and ask him at least to match at an early date the successful scheme introduced by British Rail?

Mr. William Rodgers: It has been long understood that the responsibility for concessionary fares lies with our local authorities, and that has been made plain to them. As I said in answer to an earlier Question, many of them are still recalcitrant in this respect. I do not see why the National Bus Company should take on responsibilities that are properly those of elected local authorities that are falling down on their job.

Mr. MacFarquhar: When my right hon. Friend next meets the Chairman of the National Bus Company, will he encourage him to get the subsidiary bus companies of the National Bus Company to experiment far more than at present—I think it is right to say that we have only two experiments currently in operation—with cut fares to see whether that will give greater encouragement to people to use the buses?

Mr. William Rodgers: I entirely agree. In fact, there are three schemes operating at present. One scheme has been less than successful, but two have proved to be useful experiments. I should welcome any experiment undertaken by the National Bus Company that has the effect of reducing fares, where that can be done.

Mr. Durant: I think that the right hon. Gentleman has missed the point made by my hon. Friend the Member for Harborough (Mr. Farr). My hon. Friend is asking for special fare concessions, as British Rail offers on the special ticket that is bought annually, so that fares may be paid at a special discount. It is that sort of scheme for which my hon. Friend is pressing, and which I support.

Mr. William Rodgers: I should welcome any scheme that the National Bus Company sought to introduce within its requirement to operate within the revenue support available to it from the counties, but there is no point in passing responsibility to the NBC to offer concessionary fares for categories of passenger when that responsibility should fall on elected local authorities.

M25

Mr. McCrindle: asked the Secretary of State for Transport when he now expects the commencement of the sections of M25 between the A13 and the A12 and the A12 and M11 respectively.

Mr. Horam: Subject to the outcome of the remaining stautory procedures and of a High Court action, the whole of the section of the M25 between the A12 and the A13 could be under construction by early 1979. Construction of the section between the M11 and the A12 could start later that year.

Mr. McCrindle: As the delay in starting the section from the A13 to the A12 is almost entirely due to an error on the part of the Department of Transport, should not the Minister be putting his full weight behind an endeavour to start both the sections to which the Question refers in late 1978 or early 1979, so that the whole section can be operational by the early 1980s?

Mr. Horam: I understand the hon. Gentleman's concern that both these sections of the M25 should be started and finished together as soon as possible. I undertake to do what I can to bring that about. We now have them being started in the same year, which is reasonably close. I shall endeavour to bring them even closer together than that.

Mr. Biggs-Davison: Is the hon. Gentleman aware that my constituents are glad of the protection that is to be given to Epping Forest, which we all cherish, in the design of the M25? Will he say when he expects the sections of the motorway mentioned in the Question to be completed?

Mr. Horam: I am glad that the hon. Gentleman paid tribute to the design of the scheme in the Epping Forest area. It is a most carefully thought out piece of work. As for the completion of these

sections, we are talking about the early 1980s for the completion of these parts of the M25 and the mid-1980s for the whole of the M25 around London.

Roads (Maintenance)

Mr. Costain: asked the Secretary of State for Transport what representations he has had from councils on the question of road maintenance.

Mr. Horam: Thirty-six county councils expressed concern about road maintenance in their transport policies and programmes last year. Five other councils have written on the subject this year.

Mr. Costain: Does the hon. Gentleman appreciate that experienced road engineers are getting extremely worried about the lack of maintenance? Potholes are causing accidents, and the lack of tar coating is causing the weather to penetrate below the tarmacadam, which will lead to the break-up of roads in a frosty winter. Before his hon. Friends say "More expenditure", does he appreciate that we are saving money only to cause more money to be spent at a later date?

Mr. Horam: In response to an earlier question on the subject of maintenance, from the hon. Member for Somerset, North (Mr. Dean), I mentioned our concern. I share the hon. Gentleman's feelings. We have started with the national road maintenance survey of 1976, the first results of which we communicated to county surveyors. We shall shortly make available to them the results of the second year of the survey, namely, 1977. That process will establish the objective criteria against which we can measure any decline that there may have been in the condition of the roads.

Mr. Molloy: Will my hon. Friend be prepared to consider giving some assistance to local authorities, such as the London borough of Ealing, in whose area there is taking place a massive road reconstruction operation, running right through Perivale, Greenford and Northolt, involving the GLC? The problem that the local authorities face is maintaining safety devices to enable people to cross the main thoroughfare during the reconstruction. Will my hon. Friend consider how much help he can give both to the GLC and the London Borough of Ealing?

Mr. Horam: I shall certainly consider the point made by my hon. Friend. He has written to me often about the conditions in his borough and constituency, which at present are severe. I take his point on board.

Mr. John Page: On road maintenance, has the hon. Gentleman noticed that on minor roads there are large machines that lay levels of a sort of thick black Swiss roll, which go nearer and nearer to the verges, resulting in a reduction of the camber and, therefore, a great amount of standing water at the sides? Has he had any representations from local authorities? Has he had his own clean car splashed?

Mr. Horam: That was a very individual contribution to the whole debate on road maintenance. However, I think that it is a worthwhile contribution and I shall have it examined. The stuff that is put on the roads in the way described by the hon. Gentleman is called blacktop.

Mr. Madden: Will my hon. Friend say why his Department has persuaded the West Yorkshire County Council to undertake the second and third stages of a traffic experiment in a most attractive village in my constituency, especially as the local residents and myself are entirely satisfied with the effects of the first stage? We believe that the resources that are being spent on these stages could much more usefully be spent on road maintenance in the area.

Mr. Horam: I am surprised to hear that we have been able to persuade the West Yorkshire County Council of anything. It is an especially independent-minded local authority. I shall look into the question that my hon. Friend raises.

Mr. Fry: I hope that the hon. Gentleman will now take on board the widespread concern on this issue on both sides of the House. May we hope that he appreciates that money will have to be made available fairly shortly to save tremendous expense in future? Will he bear in mind that it is sensible expenditure and that good road maintenance reduces accidents and saves money? May we have an assurance that the Government are considering carefully future levels of transport supplementary grant to ensure that adequate sums are available to keep our roads in a well-maintained condition?

Mr. Horam: There has been a decline in spending on road maintenance over the past three or four years as a result of the general restraint on public expenditure. However, that decline has now stopped and the amount of money coming forward each year is roughly level. That indicates the priority that the Government attach to a considered and well-maintained road system.

Mr. Penhaligon: Does the Minister's Department believe that the representations made about road maintenance are valid?

Mr. Horam: Some are and some are not. I could not vouch for the problem in Cornwall or in Devon, but I think that there is, generally, a great deal in what county surveyors say about the problems of road maintenance, and I would accept quite a lot of it. As I said, what we need is more objective evidence, and then we can put these matters to the full test.

Railways (Investment)

Mr. Cowans: asked the Secretary of State for Transport what is his policy towards the representations made about current levels of rail investment expressed by the Central Transport Consultative Committee for Great Britain in its annual report; and if he will make a statement.

Mr. William Rodgers: I am grateful for the committee's views. I am aware of the importance of investment to the future of the railways.

Mr. Cowans: Will my right hon. Friend accept that the Central Transport Consultative Committee expresses a deep anxiety felt by many organisations with a knowledge of the railways about the inadequate levels of investment within the industry? Will he further accept that decisions in favour of increased investment are urgently required to allow the industry to tool up so as to make possible the expansion that is needed at the end of the decade?

Mr. Rodgers: I know that there are anxieties about investment in the industry, and my hon. Friend and other right hon. and hon. Members have expressed them in the House previously. I hope very much that the more stable future that we have given to the railways and their developing business will justify


higher levels of investment in the future. We shall have to see. Meanwhile, I am certainly prepared to consider the proposals which are brought before me by British Railways.

Mr. Whitehead: Does my right hon. Friend agree that one significant investment that could be made in the expansion of the railway network is a commitment now to restart the Channel Tunnel? Will he confirm or deny the reports that appeared in The Times on Monday of this week that discussions are going on for a modified version of the tunnel?

Mr. Rodgers: I think that the prospect of a Channel Tunnel comes into a somewhat different category. I am certainly not taking part in any discussions of the kind that my hon. Friend mentions, but I recognise that a Channel Tunnel could be of importance, to railways both in this country and on the Continent, and might result in more freight being carried by rail.

Mr. Donald Stewart: Is the Secretary of State aware that the Government missed a great chance when they abandoned the Channel Tunnel as they could have blocked it at each end with a Concorde and killed two birds with one stone?

Lorries (Road Costs)

Dr. Hampson: asked the Secretary of State for Transport whether he is now satisfied that all classes of lorry are paying their full track costs.

Mr. William Rodgers: A small proportion of lorries, mainly heavy long-distance lorries, still fail to meet their attributable road costs. It remains the Government's intention that all should eventually do so.

Dr. Hampson: Is the Minister aware that it is constituents in towns such as Otley and Ripon, in my constituency, who keep asking this sort of question, because of the unbearable pressure of these heavy, long-distance juggernauts that these places must face? Will he make sure that they get out of the towns by giving priority to bypasses for historical and small towns such as these?

Mr. Rodgers: Yes, indeed. I think that the White Paper published yesterday made clear that we see a particular

priority in the coming years, less for completing something that used to be called the strategic road network than looking at the environmental problems—though this sometimes cuts both ways—of small towns and villages which are damaged by heavy goods vehicles; although, of course, that is within a framework in which we hope that more freight will go by rail. We intend that all lorries should in due course pay their full costs.

Mr. Dalyell: What has become of the Leitch Committee's recommendations for comparison of road and rail schemes where direct alternatives arise?

Mr. Rodgers: I think that my hon. Friend will recall that I accepted the main principles of all the recommendations in the Leitch Report when it was published in January. They are, substantially, embodied in the White Paper publishecl yesterday. I am very anxious to judge any new major schemes for roads against the prospects of the railways meeting the same need.

Market Weighton Bypass

Sir P. Bryan: asked the Secretary of State for Transport when he expects work to start on the Market Weighton bypass.

Mr. Horam: I am not yet able to make any definite announcement about the future of the Market Weighton bypass.

Sir P. Bryan: Does the Under-Secretary realise that since the Market Weighton bypass was first put on the trunk road scheme, many years ago now, the traffic, much of it heavy container traffic from the Hull docks, has so increased that the crowded town main street is now a continuous death trap? Does he also appreciate that since the opening up of the M62 not long ago, a fresh stream of traffic has come in, and in a year or two's time we shall have another stream coming in from the Humber Bridge? Does not the Minister think that now is the time to give this scheme first priority?

Mr. Horam: I certainly take note of what the hon. Gentleman said. We are at present studying the likely traffic pattern of North Humberside following the opening of the Humber Bridge, which we expect to be some time next summer. We shall look at the situation then. Possibly by the end of the year this will


allow us to look at the Market Weighton bypass again and see whether we can put it forward in good time.

Ports

Mr. Ridsdale: asked the Secretary of State for Transport if he is satisfied with the current organisation of the docks in relation to the operation of his transport policies.

Sir A. Meyer: asked the Secretary of State for Transport if he is satisfied with the current organisation of the docks in relation to the operation of his transport policies.

Mr. William Rodgers: Many of our ports—which is what I assume the hon. Members have in mind—are performing efficiently and well, but overall organisation is another matter.

Mr. Ridsdale: Is the Minister aware that when practical questions affecting commercial decisions have been put to him on the Dock Work Regulation Scheme, his answers have been nothing less than waffle? Is it his intention to implement the Act, or will he get rid of what is an unworkable Act as soon as possible?

Mr. Rodgers: I must confess—this may be my shortcoming—that I was not aware that the Dock Work Regulation Act was within my ministerial responsibilities. I shall certainly look into this matter. If the hon. Gentleman has a particular anxiety, I shall have it explored.

Mr. Heffer: Does my right hon. Friend agree that at the earliest possible moment, when we have a Labour Government with a good, handsome majority, we should bring the ports under public ownership, in accordance with the national ports policy as proposed by the Labour Party and by Labour Governments over the years? This is long outstanding in order to deal with the national ports problems that we have at present.

Mr. Rodgers: My hon. Friend is quite right to remind the House that this commitment remains. In the meantime, I am doing my very best in the circumstances to ensure that our ports are, as far as possible, efficient within the present organisation.

Mr. Norman Fowler: Was it not made absolutely clear in the case of Felixstowe

that there was no demand, either in the industry or outside, for further ports nationalisation? Surely the overwhelming need is for stability. Given that, will the Secretary of State say precisely what advantages he sees from extending the public sector in this area?

Mr. Rodgers: If the hon. Gentleman wishes to generalise from the case of Felixstowe, I must tell him that I could very readily generalise from the cases of the Port of London and the Port of Liverpool, for example, where representations have been made to me quite recently about the need for a change of ownership.
I think that we should look overall at the needs of the ports. I am not saying that ownership is the only question that is relevant to efficiency, but we must have a port industry that is well equipped to meet the demands. In some respects it has had a very sorry history, particularly in industrial relations.

M6 (West Midlands)

Mr. Rooker: asked the Secretary of State for Transport what is the total cost to date of repairs and maintenance on the elevated sections of the M6 motorway in the West Midlands.

Mr. Horam: Repairs and maintenance of the structure have so far cost about £300,000. In addition, about £150,000 a year is spent on day-to-day maintenance, for example, cleaning the roadway, drains and signs, and mending safety fences.

Mr. Rooker: I thank my hon. Friend for that reply. Has he made any investigation into the question why the elevated sections of newly-opened motorways—motorways opened within the last five years—have deteriorated so substantially, to the extent that many motorists consider that they are in a dangerous condition? Is there any come-back on the contractors for this massive amount of public expenditure that is now required to put their work right?

Mr. Horam: We are conducting a special survey of the raised sections, which are particularly extensive in the Midlands. We shall look carefully at the outcome. I do not think that it is a question of any come-back on the contractors. In one or two instances, there have been design faults, such as the question of


buried joints, with which my hon. Friend will be familiar. This is something from which we shall have to learn for the future.

Mr. Eyre: Is the Minister aware that the programme of repairs for the M6 motorway in the Midlands, and the M5 motorway, will produce traffic chaos during the coming months? Will he review this programme of repairs to see whether it can be staggered in some way to lessen the economic damage and frustrations that are bound to ensue?

Mr. Horam: I do not agree at all with the hon. Gentleman that the programme of repairs that we now have in hand on the M5 and M6 will produce traffic chaos. None the less, I accept his fundamental point that we must look carefully at the phasing of the repairs to these sections of road, and I undertake to do that.

Mr. Ashley: Will my hon. Friend look at the crazy system concerning repairs on the M6 and, indeed, on many other motorways, where on any day of the week one or two lanes are cordoned off for many miles, well beyond the requirements of safety, causing congestion of traffic? Will he look into this matter to see whether something can be done to expedite the repairs?

Mr. Horam: There is a conflict between getting the repairs done as fast as possible and the convenience of the travelling public in the meantime. I take note of my hon. Friend's point, and I shall look into it.

Roads (White Paper)

Mr. Shepherd: asked the Secretary of State for Transport whether his impending White Paper on roads will contain proposals for bypasses and relief roads.

Mr. William Rodgers: The White Paper, which was published yesterday, lists all my current proposals for trunk road schemes, including bypasses and relief roads.

Mr. Shepherd: Is the Minister aware that there will be much relief in Ross-on-Wye that the long-awaited, much-needed relief road is still shown in his White Paper to start in 1981–83? Can he give an assurance that the timetable in the White Paper will actually be met?

Mr. Rodgers: I hope that it will not slip. As the hon. Member knows, we have lengthy procedures now which have to be gone through before construction work begins. I should certainly like to keep to the timetable that was set out yesterday.

Mr. Raphael Tuck: Is it not essential that these bypasses and relief roads be built as quickly as possible, because we are getting more and more juggernauts from Europe which are ruining our wads, not paying their full track costs and unfairly competing with the railways?

Mr. Rodgers: I agree that we should move as quickly as possible, but my hon. Friend will recognise that 10 or 20 years ago roads were built more rapidly because there was less resistance to them and less consultation. The present-day requirement for consultation at every stage—which I think the House recognises—inevitably lengthens the process of construction, irrespective of the cost and whether any unusual hazards are discovered.

Mr. Warren: May we have an assurance that the Secretary of State will reverse the iniquitous policy of his Department, which has doubled the number of vehicles that are required to travel on a road before that road can qualify as a dual carriageway? Does he agree that no account is taken of the length of these vehicles, as the hon. Member for Watford (Mr. Tuck) said?

Mr. Rodgers: I should have thought that following the Leitch Report the tendency was for more and not less flexible decisions on standards. I have to judge, in the light of the traffic that the roads will have to bear, the cost of the roads, and environmental considerations, what the standards should be. Sometimes these standards might be lower standards—or might seem to be lower—than was hitherto intended. We have to strike a balance. I should have thought that that was what the House wanted.

Mr. Hal Miller: asked the Secretary of State for Transport when he expects to publish the White Paper on roads.

Mr. William Rodgers: As the hon. Gentleman knows, it was published yesterday.

Mr. Miller: I am grateful to the Secretary of State for his White Paper and


the spirit in which he has attempted to meet some of the criticisms that have been made in the House. Can he be more explicit on the review procedure in the White Paper? How can the public or hon. Members participate in the review of priorities—for example, the proposal that the M42 Bromsgrove section should not be built until the M5 has been widened?

Mr. Rodgers: There is no problem in hon. Members' participating in any review of priorities. Hon. Members make frequent representations to me and my hon. Friend. We are always sympathetic towards these representations, given the context in which decisions have to be made.
As I said yesterday, I should welcome—and I think that the country would—a debate in the House at a convenient time on the principles underlying our road programme, the matters set out in the White Paper and, if necessary, individual schemes in which hon. Members have a particular interest.

Mr. MacFarquhar: I congratulate my right hon. Friend on the White Paper. May I ask him if the clear implication is that in future more stress will be placed on bypasses rather than old-style motorways and that this will imply, in the case of the Derby-Stoke link, greater attention to proposals for that kind of treatment for that route?

Mr. Rodgers: The answer is "Yes" to both parts of my hon. Friend's question.

Mr. Boscawen: I applaud the intention to give greater priority to bypasses of historic towns and villages. Will the Secretary of State give more attention to the South-West of England, for which there is little flesh in his White Paper, particularly in regard to bypasses in Somerset? Will he be open to further representations on this matter in the future

Mr. Rodgers: I shall certainly be open to representations on that question. It is not easy to decide priorities. We have to do this, not only within regions but between regions, according to the principles set out in the White Paper. The particular priority that we want to give to the ports and the outer London orbital road, for instance, has to be

weighed against the background of our wish to protect the environment.

Stoke-Derby Route

Mr. Knox: asked the Secretary of State for Transport if he is yet in a position to announce the preferred route for the Stoke-Derby route.

Mr. Horam: We hope to announce this summer proposals for dealing with the most urgent sections of the Stoke-Derby route. As I told the House on 16th November, it will take some time to deal with the whole of the link.

Mr. Knox: Is the Minister aware that my constituents in Draycott, Tean and Checkley are becoming angry about the delay on this route? Is he aware that 16 months have elapsed since comments had to be submitted on the different schemes? Can he offer an earlier date than one during this summer?

Mr. Horam: No, I am afraid I cannot. A date during this summer is a reasonable one, in view of the difficulties of the scheme. The hon. Member knows that we have had to consider not only the question of the villages to which he has referred but the whole of the 42-mile link between Stoke and Derby, and whether we should do this by way of a series of bypasses or a full motorway system. We shall have to see. On page 47 of the White Paper we say that this scheme will be started between 1981 and 1983. I hope that we can deal with the more urgent sections more expeditiously.

Mr. Whitehead: Is my hon. Friend aware that in Derby an inquiry is being conducted—it is now in its fourth week—on the question whether we should have an urban motorway through the town or take heavy lorry traffic to the south and east? This would include the proposed Derby-Stoke line. When will the Department declare its hand and allow a fair consideration of both these alternatives?

Mr. Horam: I hope that the Derby public inquiry, which is now in its fourth week, will give full and proper consideration to the Allestree link road.

Driving Convictions

Mr. Temple-Morris: asked the Secretary of State for Transport how long on average it is taking the Swansea vehicle


licensing centre to furnish details of driving convictions to courts of law that request them.

Mr. Horam: In February this year—the latest month for which figures are available—99 per cent. of police inquiries were dealt with by the Driver and Vehicle Licensing Centre within 10 working days from receipt, and many in considerably less.

Mr. Temple-Morris: Will the Minister and his right hon. Friend firmly take on board the fact that this is one of the worst instances of the working of the Swansea Driver and Vehicle Licensing Centre? Regardless of the figures that he has just given, is he aware that in many cases and in many courts it is taking up to five weeks after interrogation at the Swansea centre before criminal and driving convictions are received? Is he aware that the most serious aspect of this is that people often have to remain in custody as a result of the inadequacy of the Swansea centre? Will the Minister and his right hon. Friend do something about it?

Mr. Horam: I take note of what the hon. Member has said, but I think that he is exaggerating the position. The hon. Member may be aware that we are looking into the possibility of a telex link which will speed up inquiries.

Mr. Anderson: Is my hon. Friend aware of the praise which has been lavished on the centre by a deputation of chief officers of police, who visited the centre last week? Will my hon. Friend arrange an early visit of hon. Members so that parliamentary critics who might go to scoff might be similarly impressed with the centre?

Mr. Horam: I think that the police might also have a conversation with the hon. Member for Leominster (Mr. Temple-Morris) in order to sort out their conflicting views. I note what my hon. Friend said. It might also be a good idea if hon. Members could visit the centre and see how well it is performing. The number of inquiries to the centre has dropped by 25 per cent. in the past few months. The improvement is considerable.

Mr. Rooker: What is the statutory authority for linking the Swansea computer, holding all the drivers' records, with the new police computer at Hendon?

Mr. Horam: That is something which we have looked at under the existing authority.

Mr. Rost: The Minister appears to be complacent about the inefficiency of the Swansea centre. Would not hon. Members be more impressed with the centre not by visiting it but by receiving fewer complaints about it from constituents?

Mr. Horam: I agree. Hon. Members are receiving fewer complaints, as my postbag shows. I have to answer the complaints that hon. Members send to me. My mailbag is down.

Council of Ministers

Mr. John Evans: asked the Secretary of State for Transport when he next expects to attend a meeting of the European Economic Community Transport Ministers.

Mr. William Rodgers: On 12th June.

Mr. Evans: Has there been any progress at all in any of the matters that the Commissioner for Transport has put to the Council of Ministers as priorities, and, if any, on which ones? Second, will my right hon. Friend consider putting in the Library a copy of the action programme so that hon. Members interested in transport may see the great amount of legislation in this important field which is threatened from Europe?

Mr. Rodgers: I shall certainly arrange to put a copy of the programme in the Library. I am very happy to do that. As for progress made, I think it only fair to say that progress has not been very fast, but I am sure that at our meeting on 12th June we shall have an assessment of this from the Commissioner.

Mr. John Page: When the Secretary of State meets his European colleagues, will he tell them loudly and clearly that he has no intention whatever of introducing kilometres on British roads, for at least two reasons—first, that one cannot export British roads, and, second, that boring harmonisation is unnecessary? Will he stand up for the principle of "Vive la différence"?

Mr. Rodgers: I shall certainly tell my colleagues in Brussels, when appropriate, exactly what I have said in the House on the whole question.

OIL AND GAS (LICENSING)

The Secretary of State for Energy (Mr. Anthony Wedgwood Benn): With permission, Mr. Speaker, I want to announce three new policy decisions on offshore oil and gas licensing.
First, the Government have decided to award licences for 10 blocks to the British National Oil Corporation and the British Gas Corporation, nine to BNOC and one to British Gas. A list of the blocks concerned is being lodged in the Library with a map showing their location. This will increase the national stake in the total area licensed and allow effective depletion polices for any reserves found in the new blocks. It will also help to ensure a continuing programme of work for the Corporations' operating teams.
Secondly, BNOC, or British Gas in suitable cases, will now for the first time have the first opportunity of negotiating to acquire any interest in first-to-fourth round licences that an existing holder wishes to dispose of by transfer.
Any licence holder seeking to make a change of this kind will normally be asked in the first instance to give BNOC or British Gas an opportunity to negotiate for the acquisition of some or all of the licence share being released. In the ordinary course of events, it will only be after a genuine attempt at meaningful negotiations by the Corporation and the assignor has failed, or that the Corporation does not want to pursue them, that applications for the transfer of a licence interest to a private-sector third party would be considered. This policy will help to improve the national equity share in earlier licences—which at present amounts to only about one-eighth of the area licensed.
The Government have also now decided in favour of a sixth round of licensing of some 40 blocks open to applications from private sector companies. In this the oil companies will be able to continue making an important contribution to our offshore exploration and development programme. I shall soon be publishing a consultative document containing detailed proposals for the terms and conditions that will govern the round, which I am sure will engage the interest of oil companies from many parts of the world.

Mr. Tom King: Although we welcome the announcement of the sixth round, which we trust will not take quite as long as the previous round to organise, will the Secretary of State take it that we have the gravest reservations about the rest of his statement? No mention was made of the fact that it flies in the face of all the assurances given by Ministers on the Second Reading of the Petroleum and Submarine Pipe-lines Bill that the British National Oil Corporation would not be given special privileges as a State oil company in this field. [HON. MEMBERS: "Why not?"] That was an assurance given by Ministers on the passing of the Act, on which basis the House passed the Act. Secondly, will the Secretary of State recognise that we regard it as very close to an abuse of ministerial administrative power to give a preemptive right on farm-ins—a first option which was not included in the legislation?
Since the Secretary of State made clear in his statement the important contribution which oil companies all have to make to the development of the North Sea, and since we regard it as essential to confidence and trust in the fair dealings of the British Government in the development of this national resource, will the right hon. Gentleman understand that we regard his statement as not helpful in that direction?

Mr. Benn: I am not at all surprised by the hon. Gentleman's questions since the Opposition have consistently resisted, from the time when they were in office until now, any extension of British control over oil in the North Sea, and on many occasions they have quite falsely forecast disasters which they said would flow from the Government's policy. Many times since I have been Secretary of State—and before then—I have heard Opposition spokesmen say that if we did this or that it would deter foreign investment in the North Sea. That has not happened. The development of the North Sea is going on apace. But we believe that it is right that the British people should have a growing share in the benefits of the North Sea, and the statements made by Ministers when the Bill was passed were absolutely in line with the statement which I have just made.

Dr. Phipps: Is my right hon. Friend aware that the current practice for farm-ins is that the companies first negotiate


with private industry and then a refusal is given to BNOC on the same terms? Is it the intention that this practice should be continued? Secondly, is it intended in the sixth round of licensing that BNOC should pay for its share of exploration costs?

Mr. Benn: On the latter question, I have just announced that I shall be issuing a consultative document about the sixth round, and that will allow for consultations. I hope that my hon. Friend will not press me to anticipate that document. As regards the first point, this does represent a change, but we believe that where someone holding a block wishes to assign it to somebody else, the first negotiation on the licence share should take place with BNOC and only in the event of failure should the matter come to me for assignment to a private company.

Mr. Macfarlane: Does the Secretary of State recognise that his announcement will do nothing to attract long-term foreign investment into the North Sea and that, far from attracting foreign oil companies into the 40 blocks, which he earnestly suggested would occur, it will have the reverse effect, and this Government will once again have done nothing but deter foreign investment beyond 1985 and into the 1990s? What can the right hon. Gentleman say about that?

Mr. Benn: The hon. Gentleman's question reminds me of the comment about Wall Street having forecast 10 of the last three recessions in the United States. The truth is that, despite all the warnings which have been given by the Opposition—sometimes, apparently, as spokesmen for the private oil companies—our programme has proceeded. The investment has been available. Money has come even for BNOC financing its own development. I may add that BNOC today announced that the Thistle field came on stream, and had it not been for the role of the public sector, following the failure of the Burmah Oil Company, the development of the North Sea would have been not only slower but in hands not within the control of the House.

Mr. Grimond: Could the Secretary of State give some indication of where these blocks are, since we cannot yet see the map? Are they all in the North Sea,

are they in the Channel, or are they in the Atlantic? Where are they? Secondly, how many of them could BNOC operate? Could it operate all the nine allocated to it? Finally, does the right hon. Gentleman expect that this will mean any increased demand for pipelines and terminal facilities, for instance, in Sullom Voe in my constituency?

Mr. Benn: It is difficult to convey a map in an oral statement, and that is why I suggested that it would be better to put it in the Library. In fact, them are nine blocks for BNOC and one for British Gas. A number of them are off the Shetlands, which I know is of special interest to the right hon. Gentleman. There is also something in the South-West Approaches. The intention is that there will be further work in the industry onshore flowing from these developments. There is one other point which I think I should emphasise, knowing the right hon. Gentleman's concern, namely, that if exploration is done by the public sector the capacity for depletion control is much greater since it does not follow that if the oil is explored it has to be developed at the same pace as if it were done by a private sector company. This will give us oil reserves in hand if they are discovered as we expect, which will allow us to follow a more national depletion policy than could happen under the private sector.

Mr. Dalyell: Without asking for an oral map, may I ask my hon. Friend whether any of the blocks are in deep water? If they are, is there any possibility of special help for development because we all understand that the deep water creates special problems and there are advantages for British exports if we can develop this technology.

Mr. Benn: Some of them are in deep water, but it is very difficult to convey fully some of the technical aspects without studying the papers. That is why we have put a map in the Library.

Mr. Gordon Wilson: Does the right hon. Gentleman realise that the Scottish people wish to have a realistic depletion policy? Following his answer about depletion, will he say, in relation to the sixth round on offer to the private sector, whether notice will be given to the oil


companies concerned of the Government's intentions in relation to depletion policy and an improved taxation regime to cut out some of the loopholes that seem to be developing?

Mr. Benn: Taxation is for my right hon. Friend the Chancellor of the Exchequer, and I would not seek to answer on his behalf. But I will say this on depletion policy: when the oil companies were first coming into the North Sea and their investment was very heavy before the returns came—front-loaded investment, as it is called—it was necessary to give some assurances that those who invested would be able to develop their fields. Therefore, in the early days those assurances were given, relating to fields that were already under development. This was in 1974. As we move into a new phase of oil policy—particularly through private sector development, but this applies more generally—we are freed from assurances given in the past.
Having said that, I must also remind the House—the hon. Gentleman will know it—that if we wish to attract foreign technology and foreign investment, as we need and have been able quite successfully to do, we shall have to have regard to the fact that those who invest substantial sums of money must have a reasonable assurance that they will be treated fairly on depletion policy. That is the policy we have pursued entirely up to now, and it is why all the warnings from the Conservative Party have been entirely unjustified in their implications.

Mr. Palmer: Will this very welcome progress in the fortunes of BNOC have any effect on the salaries to be paid to the members of the board? If there is to be an increase, as is rumoured, what will be the effect on the pay of the other leaders of nationalised industries?

Mr. Benn: My hon. Friend is raising a point that has been the subject of comment, that board members of the nationalised industries have felt that advertising the proposed salary for the deputy chairman of BNOC raised again their anxieties about their own position. This is a matter with which the Government are dealing separately.
I hope that the House will also recognise that in fixing the remuneration for

a national oil corporation we must remember that the international going rate for oil companies is at an enormous level. I think that the chairman of British Petroleum recently had an increase of £90,000 or £95,000 a year. I hope that that will be borne in mind by those who are quite properly pressing their own quite understandable claims.

Several Hon. Members: rose—

Mr. Speaker: I propose to call all those hon. Members who have been rising so far.

Mr. Forman: In the light of what the Secretary of State said a little earlier in answer to a question from an SNP Member, the hon. Member for Dundee, East (Mr. Wilson), do we take it that this statement constitutes a covert attempt by the Government to move towards a more cautious depletion policy? If so, does that mean that the statement of the Secretary of State for Industry in December 1974 no longer applies?

Mr. Benn: No, Sir. The hon. Gentleman is confusing two points. The reason the assurance was given by the then Secretary of State, my right hon. Friend the present Secretary of State for Industry, was the reason I gave, that in order to attract investment on the necessary scale in the first stage assurances had to be given about fields under development.
But the hon. Gentleman's second point is quite correct. At the present rate of development of the North Sea we are moving up from no oil three years ago to 60 million tonnes this year and possibly up to 150 million tonnes by the mid-1980s, on the basis of fields already under development. The rational and sensible thing for us to do is to retain a discretion over depletion policy so that we can push the gains from the North Sea oil further into the future instead of being committed by commercial decisions, which would happen if we left it entirely to the private companies to develop the North Sea.

Mr. Skinner: Will my right hon. Friend confirm, in order to get the record straight, first, that those initial blocks were handed over at knockdown prices by the then Tory Government to the multinational oil giants; secondly, that as of now, in all the oil-producing fields in


which we have an interest, we have a 50 per cent. ability to purchase and not to control; and, thirdly, that this is likely to be an election issue of great importance, as the Opposition are still intent on waving the flags of the multinational oil giants instead of the Union Jack?

Mr. Benn: My hon. Friend is quite right, that when the licences were granted for the oil companies in the first instance there was no provision whatsoever that the United Kingdom would have an adequate equity holding or, secondly, that even the royalty which was payable would be payable in oil, or that there would be any participation. There was no petroleum revenue tax whatever under the previous Administration. All of these things we have done—

Mr. Tom King: It had already been announced.

Mr. Benn: There had been a vague hint that something might be done, but in Government there is a basic principle of judgment by results, and the hon. Gentleman's party left to the incoming Government no legislation, no participation, no petroleum revenue tax, no BNOC, and arrangements all of which we had to change. Whether that will be, as I believe it should be, an election issue, is a matter that every hon. Member can determine for himself.

Mr. Rost: Is it not also clear that it was the previous Conservative Government that set the oil moving and allowed private enterprise to get the oil, without which the right hon. Gentleman would not now be able to pretend that he was claiming the oil for the British people, when it was already well within the legal control of the British Government and the British people? Will he now admit that his announcement today is a major step towards further backdoor nationalisation and a breach of undertakings he has given to the House and to industry, and will do nothing to improve the prospects of more efficient production of this oil or improve the take that the British people will get from it?

Mr. Benn: The hon. Gentleman should consult his history, because the first nationalisation of an oil company was done by Winston Churchill, then a Liberal, taking a majority holding in the Anglo-Persian oil company, now BP,

which has been a very successful venture from the point of view of the British people and the British taxpayer.
It passes my understanding why a party which used to pretend to speak for the national interest should regularly denounce any extension of British control and ownership of the oil in the continental shelf.

Mr. Flannery: Does my right hon. Friend agree with me that Dr. Johnson had a fair point when he said that patriotism was the last refuge of the scoundrel? [HON. MEMBERS: "Oh."] Wait for it. Would he further agree that members of the Conservative Party, which arrogates to itself that it is patriotic, want to sell the oil interests to foreign private enterprise instead of allowing the British people to reap the benefit of this bonus? Would he finally agree that Winston Churchill well condemned them when he was a Liberal, when he said that they poured out patriotism by the imperial pint and pointed out that they never fought for the interests of the British people?

Mr. Benn: That is all part of the history, and I shall not go over it again, except to say that there has been a great debate, which is still in progress, about what this country should do with the North Sea oil revenues. It might be useful to tell the House that if we had not had the policy of the present Government there would be no revenues to discuss.

Mr. Alexander Fletcher: Does the right hon. Gentleman recall that when he presented the Petroleum Revenue Tax Bill and the Petroleum and Submarine Pipe-Lines Bill to the House he did so on the basis that they were both very much in the national interest? Has this legislation failed? Why does he find it necessary now to protect BNOC? Is he saying that the oil companies are still bringing a disadvantage to the British people? Are they doing Britain down? Does he not agree that the oil would still be at the bottom of the North Sea had it not been for the enterprise of the oil companies?

Mr. Benn: I made absolutely clear in an earlier answer that we needed the technology and the investment to develop the North Sea, and nothing that the Government have done in order to defend and


extend our national interest has in any way checked the flow of oil.
It would be very naïve to suppose that oil companies, which deal with Governments all over the world, would not expect the British Government to try to defend the interests of the British people. When the Bill was introduced, the BNOC did not exist. It was forecast in the Bill and enacted. The British Gas Corporation was last year given one sole licence. We did not have all that trouble at that time from the Opposition. Perhaps they did not notice it.
In my opinion, it is right and proper that this country, whose whole future depends upon energy—we shall be the only industrialised country in the West which is self-sufficient in eneregy in the years ahead—should have control and ownership of a growing share of the North Sea. At the moment it is one-eighth of the licence blocks that were allocated by the previous Government. We think that it should be greater and hope that the arrangements today will lead to that.

Mr. Ron Thomas: Will my right hon. Friend not agree that it is nonsense to suggest that a publicly owned oil extractive industry should not have command of the funds and technology internationally to exploit North Sea oil on behalf of this nation?
Will my right hon. Friend also agree that the response from the Opposition is quite negative? They believe that if there are losses, the public should meet them, and that if there are profits, these should be for private enterprise. Will my right hon. Friend assure us that in the sixth round we shall see an extension of the British people's control over their own resources?

Mr. Benn: I cannot anticipate the statement, except that I imagine that the drift of what I said today indicates to the House that we think it right that there should be a growing British role and that we shall seek to achieve it as best we can.
The proposal concerning the British hydrocarbon corporation was brought forward 10 years ago by a Labour Party group and was later put into the manifesto and implemented. Had it not been for the BNOC, the disaster which followed

the difficulties of Burmah would have led to some interruption in the development of the Thistle and Ninian fields. The international oil companies, which are very familiar with dealing with State oil corporations, are quite ready to go along with this proposition. Indeed, I read in the newspaper that the Alaskan Senate was asking about the possibility of participating in the pipeline in Alaska.

Mr. Heffer: Will my right hon. Friend accept that there will be full support for his statement on the Labour Benches, as well as warm congratulations to him, as he is acting in line with Labour Party policy?
Is it not obvious that the Conservative Front Bench is following the tradition of one of its namesakes, namely, Tom King, who was the lieutenant of Dick Turpin, who wanted to hold people in this country to ransom? Will my right hon. Friend not agree that that is precisely the view that Conservative Members take of this matter?
Is it not right, further, that we should be moving step by step—I do not apologise for this—towards full public ownership of the oil interests in this country, so that the people of this country can have the full benefits of the oil that we have?

Mr. Benn: May I, in responding to my hon. Friend—who would not expect me to go beyond the statement that I have made—say that if the Opposition seek to persuade the British people that there is an automatic correspondence of interest between the multinational oil companies and the people of this country, the people will recall the experience in the Middle East, where for many years the grinding poverty in the Arab countries coexisted with substantial profits for the oil companies. I think that the Conservatives would be very ill-advised to try to put across their case to the British people, who will see the merit in what we have announced today.

Mr. Maurice Macmillan: Will the right hon. Gentleman put the record straight by agreeing that the late Sir Winston Churchill acquired shares in British Petroleum in order to ensure fuel for the Navy? Can the right hon. Gentleman's Government ensure that we shall have a Navy to protect the North Sea?

Mr. Benn: The right hon. Gentleman has no doubt read, as I have—and regularly re-read—the speech made by Sir Winston Churchill on that occasion. The right hon. Gentleman will have read that one of the reasons that Sir Winston Churchill introduced the Bill was, as he put it, that this country and other consumer countries were being throttled by the oil trusts and: that it was in the national interest that this country should have access—and secure access—to oil for its own purposes. Admittedly, in that case it was a matter of naval development, but why should industrial progress be seen as less important than naval development?

Mr. Tom King: Is the right hon. Gentleman aware that we totally reject his allegations that we are not proper custodians of the national resources in this respect? Is he aware that the first White Paper of this Labour Government recognised that it was a Conservative Government who brought the oil on the continental shelf into firm British ownership under the Continental Shelf Act 1964? Does he not accept that a Conservative Chancellor of the Exchequer had already announced in 1973 that a new taxation regime would be introduced, and that, as not a drop of oil was landed here until 1975, no revenue was lost? [Interruption.] Moreover, it was the rapid escalation of prices in 1973–74 which made the taxation imperative—[Interruption.]—as was recognised by hon. Members in all parts of the House.

Mr. Benn: If the hon. Gentleman is ready to base himself on the record of the Government of which he was a supporter—

Mr. Speaker: Order. The hon. Member for Bolsover (Mr. Skinner) must not give a running commentary all the time when other hon. Members are speaking.

Mr. Skinner: On a point of order, Mr. Speaker. I was merely trying to draw to your attention, and that of other hon. Members, the point that perhaps the Opposition spokesman has not the permission of his leader—

Mr. Speaker: Order. The hon. Gentleman is too shrewd a parliamentarian to think that he has done very well with that intervention.

Mr. Benn: If the hon. Gentleman is ready to rest upon his record and to justify again, in the light of circumstances, his party's hostility to the oil policy that this Government have introduced, and is prepared to justify all the false forecasts of doom which have come from the Conservative Benches since 1974, I am very happy that the matter should be put to the electorate to decide.

INVESTMENT INCOME SURCHARGE (ABOLITION)

3.57 p.m.

Mr. John MacGregor: I beg to move,
That leave be given to bring in a Bill to abolish investment income surcharge.
This Bill is about jobs, about economic growth and about fair play. Whatever the earlier case for an extra impost, on investment income, the developments on the tax front and the growth in the tax burden over the past four years now mean that the surcharge is having seriously damaging effects in a number of important directions, and I seek this opportunity of drawing attention to them and tackling them. I wish to make six main points in relation to jobs, economic growth and fair play.
First, concerning jobs, there is now widespread agreement that in dealing with the appallingly high level of unemployment one of the main contributions in the future will have to come from the small businesses, because the public sector and the large and medium-sized companies in this country will be seeking in many cases to shed labour rather than to promote new jobs. Yet the small businesses are quite inadequately encouraged at the present time.
Much of the evidence to the Wilson Committee on the City has drawn attention to the problems of finance for small businesses. Indeed, the institutions, the banks and so on, are now doing much to assist in that area. But the real gap—and, I suspect, an increasing gap in the future—is for finance in start-up situations, in venture capital, and for the very small businesses, because the banks and institutions naturally do not wish to risk equity capital at that point since they have their own depositors to take care of.
Getting the small business off the ground is still one of our major problems. Previously, this used to be done by private investors who knew the locality, knew the people and were prepared to risk some of their spare capital in order to get these businesses going. It is done in this way in America and in other countries where positive fiscal incentives are given compared with the fiscal disincentives that we apply here.
Even the National Research Development Corporation, in its recent evidence to the Wilson Committee, said:
The mortality rate of small companies is high, and this in turn inhibits support for new technology-based firms in general. Special measures, including increased fiscal incentives (or the removal of current fiscal disincentives), may be required to promote the growth of small innovative enterprises.
The plain fact is that the risk of losing one's money in small businesses is high and the reward is virtually nil, especially at a 98 per cent. tax rate. I believe that it will be right—as I believe the Chancellor of the Duchy of Lancaster is considering—to introduce relief for losses against other income in order to assist start-ups. But the abolition of the investment income surcharge is also necessary to assist and encourage jobs in small businesses.
Secondly, turning to the more general aspects of growth, we are all agreed that we want to see more investment in British industry and commerce and, perhaps more important, better use of the investment. I would be the first to admit that encouraging saving is only one part of this problem. There is a need first to see the demand side increasing, as we do not have demand for new investment and for new capital on the scale required as we would all wish to see at the present time, because of the lack of confidence in British industry.
But at some stage the importance of the saver and the investor will come back into play. We do need to encourage new capital. Again, the investor gets poor rewards for subscribing to equities at present. For the high taxpayer the return is minute and after inflation is often acutely negative. Each year today there is a 5 per cent. decline in the number of shareholdings in British companies, and it is the individual small investor who is getting out. To a considerable

extent that is a tax matter because of the fiscal benefits to the pension funds, on the one hand, and the fiscal disincentives of high rates of taxation, especially investment income surcharge to the direct investor, on the other.
Another worrying aspect of this matter is the ever-increasing reliance on institutional investment in the Stock Market. I believe that this should give us some considerable cause for concern, because it means intensified volatility in the market, possibly less investment in the secondary, middle and smaller public companies and hence greater difficulty for them in raising new capital, and some would also argue the risk of only a small number of investment decision takers in stock market investment tending to concentrate on investment fashions. The abolition of the investment income surcharge would help to redress that balance and to get more investment directly from investors into British industry through equities.
Thirdly, I want to turn to one particular aspect—growth in farming. About 45 per cent. of agricultural land today is tenanted. Yet the fiscal burdens on the agricultural landlord—unless again it is an institution—are now penal, partly because his returns are treated as investment income. If he is paying between 80 per cent. and 98 per cent. in tax, he is less likely to be willing to invest in improvements to land, buildings and machinery because of the feeble after-tax return at the end of it. This is harmful to agricultural production as well as to all the allied industries which depend on a successful and growing agriculture.
It also means that many are tending to bring land in hand as soon as they can, for fiscal reasons, which is harmful to future tenant farmers in this country. I believe that we should be seeking a definition of a working landlord and enable him to benefit from current agriculture fiscal reliefs. That is the way mainly to go forward to the benefit of agriculture generally. Meanwhile, the abolition of the investment income surcharge would help.
My last three points relate to fiscal justice and fair play. Fourthly, we now have an appallingly muddled position in relation to tax on savings. Wins on the pools or on horses are virtually tax-free. Savings through pension funds and life assurance obtain a variety of tax benefits


which significantly affect the investment decisions of the saver. Gilts and other forms of Government savings, such as the Trustee Savings Bank, have considerable tax-free advantages which much distort the flow of savings patterns. It is important here to realise that the Government by their tax decisions are greatly benefiting themselves in relation to savings, especially in connection with high-rate taxpayers for whom gilts held for more than one year are enormously more advantageous than any other form of saving.
Only equities, building societies and other forms of private sector saving have to suffer the whole battery of taxes on savings. Investment income surcharge is one of the significant ones. Its abolition would help to remove distortions—indeed, gross distortions—which fiscal measures have so sweepingly introduced into savings.
Fifthly, I turn to the international comparisons. Few countries today have an investment income surcharge at all. None among our industrial competitors has rates on earned or on earned and investment income combined anywhere near ours reaching up to the top rate of 98 per cent., nor at the levels of income at which we impose them. I believe that it is no coincidence that we are not only so far out of line with them in our tax measures and tax burdens on direct and investment income but frequently out of line in our success in growth rates.
Sixthly, and most troubling of all, I want to draw attention to the quite unfair burden that the investment income surcharge now imposes on those with comparatively low incomes and on those aged over 65. Indeed, it is these groups with whom I am most concerned, despite all the other very important arguments, in pushing this measure today. One hundred and sixty thousand of those who pay investment income surcharge—or roughly one-third—have incomes below £4,000 a year. Indeed, this morning I had a letter from a constituent aged 58, who has just been declared redundant and who will have to make use of his redundancy payments and the savings which he has developed over his lifetime. He has an income—which he will expect not to grow from now on because he does not expect to get a job at his age—of about £2,000 a year and is naturally

infuriated as he now finds that he is paying a marginal tax rate of 44 per cent. on that income.
Over 45 per cent. of those paying the investment income surcharge are pensioners. What I find so appalling here is the quite unfair situation where those who are fortunate enought to have occupational pension schemes or self-employed schemes have their savings treated as earned income after the age of 65. But there are those who are not able to be in that position, perhaps because they were in a company which did not operate such schemes or had a small business and were not able to afford the self-employed annuity schemes which were not so generous in the past. Those who concentrated their savings on building up their businesses and get their retirement savings out of that business, or in other ways, find that they have this huge burden at a very modest rate of income of a 49 per cent. marginal tax rate.
It is scandalous that those who built up their savings in this way should be discriminated against. As the Building Societies Association points out, a single pensioner pays at a rate of 49 per cent. with an income of £3,410, whereas someone single and of working age has to reach an income level of £6,945 before he pays above the tax rate of 34 per cent. That is quite monstrous discrimination.
What particularly riles these people is that this is not unearned income at all. What they are getting after the age of 65 is income out of savings earned out of a hard working life and out of taxed income during that working life. There is no wonder that there is so little incentive to save in certain directions today, especially after inflation is taken into account. No wonder that the children of so many of these people—[HON. MEMBERS: "Too long."]—should see themselves what has happened so that they no longer wish to save.
In conclusion, I recognise that there are many priorities in tax today. I have been among the first to argue for many of them, especially for those on low incomes and many others. I recognise that it may not be possible to carry through this measure exactly in this form at the present time. But I do believe that we should at least have amendments to this Bill to raise the threshold to £4,000 to


bring it back in real terms to where it was only a few years ago to help the pensioners, or perhaps to abolish it altogether on the pensioners as the Building Societies Association has urged.
But it is because I believe that the arguments long term for abolition are so compelling that I have sought to bring the Bill forward in this way today in order to encourage the wealth creators and the risk takers.

4.8 p.m.

Mr. Austin Mitchell: I rise to oppose this iniquitous proposal. Indeed, the case against it is so simple and so clear-cut that I hope I shall have the support of Opposition Members in opposing it.
The basic issue is that there is a clear distinction between earned income and what used to be called unearned income or dividend income. The two should be treated differently for tax purposes. The distinction comes because earned income is inevitably more precarious because it can be affected drastically by health, unemployment, injury and cut-back whereas dividends come rolling in inevitably. Even if for some strange reason dividends stop there is still the capital to fall back on and that capital in itself confers a greater taxable capacity than simple earnings.
There has also been a distinction between that and earned income, which implies personal work and personal effort, and which has always been regarded as socially more worthy than simply living on the efforts of others. There is a distinction betwen those who labour with their hands and brains, or both, and those who toil not neither do they spin.
There is a distinction, too, based on the fact that work implies expense, such as getting to work, which dividend collection does not imply. Finally, there is a distinction based on political philosophy. I am not talking about the difference between capitalism and labour. We all know that capitalism is the exploitation of man by man. Under Socialism it is the other way around. I am talking about equality. We are the party of equality, and we believe that wealth should bear its share of the tax burden that faces this country. This is a very minimal share—£310 million a year. I hope that this burden

will be increased by a wealth tax, rather than reduced by the abolition of the unearned dividend surcharge.
There is a distinction, which has been accepted by every Government since 1907, between earned and unearned income. This has been accepted by every Conservative Government, including Lord Barber of the printing presses, who introduced the surcharge. In supporting this measure the Conservative Party is going against its own history. It introduced this surcharge.
It is interesting to trace the evolution of this thinking because "The Right Approach" made no mention of the abolition of the surcharge. But then came the revised standard version, "The Righter Approach"—in other words "The Right Approach to the Economy"—which issued this clarion call:
We are increasingly doubtful about the wisdom of retaining any kind of Investment Income Surcharge;
Brave, stirring stuff. "Increasingly doubtful"—I can visualise them steeling themselves to come out with such a sweeping, generalised statement. The mountains have apparently laboured a bit further now and produced the hon. Member for Norfolk, South (Mr. MacGregor) and his ridiculous measure, which is an achievement.
It is interesting that after eight years of evolution in policy the Conservative Party is now back with the policies that it put forward in 1970—on immigration, labour relations, tax and on its attitudes towards incomes policy. Selsdon man still lives on as the Selsden person. The hon. Member for Norfolk, South has gone even further, because he has taken us back 70 years to the Conservative Party of Balfour and Salisbury—the last Conservative Party that did not recognise the distinction between earned and unearned income.
The hon. Member for Norfolk, South talks of examples overseas. But our main competitors—the United States, Japan. Italy and France—all recognise some kind of distinction between earned and unearned income.
The measure is further unnecessary. The hon. Member for Norfolk, South made the case for those with a small amount of capital. Indeed, as he spoke, a positive pantheon of widows, orphans


and small business men—all smaller than himself, though maybe not in substance—and divorcees flitted into my vision around his head, all wailing and gnashing their teeth. This was partly at the weakness of his argument and partly at the picture he painted. In fact, the tragic picture he was painting is just not true. The problems of the small man and of the old can be taken care of by exemptions which this Government increased last year to £1,500 and to £2,000 for those over 65. These exemptions mean that we are talking about those with big money.
Take the old people over 65, for example. The exemption of £2,000 before surcharge means that we are talking about people who have capital of over £20,000. This is a pretty hefty sum by any standards, although perhaps not by the standards of the hon. Member for Norfolk, South. He has spoken about divorcees, but they qualify for an exemption of £1,500 plus a further maintenance income of £1,500, which means a total maintenance of £60 a week before the surcharge comes into force. Most Grimsbarians are not paying maintenance of £60 a week to their divorced wives. I do not know what it is like elsewhere, particularly in Norfolk, South, but most of us in the North would regard that as big money.
We are not talking about small business men or farmers. Their income is earned income and therefore does not qualify for the levy. In other words, we are seeing today a typical Conservative device of shoving the widows, the orphans and the small business men in the front line of a battle which is really about big moneyed interests and capital. The Conservatives are really defending the vested interests of those with money.
One can always argue, as the Conservative Party did last year in the Finance Bill Committee, for an increase in the exemptions. But that is totally different from sweeping away the entire principle of the surcharge. The two things are totally different. It is impossible to contain in the same argument a demand for an increase in exemptions and a demand for the abolition of the surcharge.

It is not for me to say whether the Chancellor intends to increase the exemptions in his forthcoming Budget. I cannot get to see him because he has been so tied up with the hon. Member for Cornwall, North (Mr. Pardoe), and we cannot get past the debris of Liberal Party policies in order to get into his office to put the case for it.

In the present situation in which Government spending and public employment are the main drive motors of the economy, and in which, unless Government spending is maintained, there will be a massive increase in unemployment, we have only limited scope for tax cuts. What tax cuts can be made in such a situation they should and must go to the less-well-off, rather than handing out £310 million to the moneyed interests and those with capital to play with.

To conclude, there is a clear distinction between earned and unearned income which all parties have recognised since 1907, the Conservative Party included. The anomalies that exist can be taken care of by an increase in the exemptions in the same way that they were increased last year. This is a totally different argument from that of abolishing the surcharge entirely.

Abolishing the surcharge is essentially a piece of special pleading based on specious arguments about incentives and savings. In fact savings are going up and they have been going up for the last three years under this kind of regime. What the Conservatives are really defending are vested interests. That is all right for the kind of debating school politics we are seeing today, but it cannot be incorporated in the manifesto of any political party which aims to run this country when it grows up. Therefore, I hope that hon. Members will join me in opposing and voting against this proposal.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and Nomination of Select Committees at Commencement of Public Business):—

The House divided; Ayes 150, Noes 166.

Division No. 159]
AYES
[4.16 p.m.


Adley, Robert
Atkinson, David (Bournemouth, East)
Beith, A. J.


Arnold, Tom
Awdry, Daniel
Bell, Ronald


Atkins, Rt Hon H. (Spelthorne)
Banks, Robert
Bennett, Sir Frederic (Torbay)




Benyon, W.
Hayhoe, Barney
Page, Richard (Workington)


Berry, Hon Anthony
Holland, Philip
Pardoe, John


Biffen, John
Hooson, Emlyn
Penhaligon, David


Biggs-Davison, John
Horoern, Peter
Peyton, Rt Hon John


Blaker, Peter
Howe, Rt Hon Sir Geoffrey
Powell, Rt Hon J. Enoch


Boscawen, Hon Robert
Howell, David (Guildford)
Pym, Rt Hon Francis


Bottomley, Peter
Howell, Ralph (North Norfolk)
Raison, Timothy


Brittan, Leon
Howells, Geraint (Cardigan)
Renton, Rt Hon Sir D. (Hunts)


Brocklebank-Fowler, C.
Hunt, David (Wirral)
Renton, Tim (Mid-Sussex)


Brooke, Peter
Hunt, John (Ravensbourne)
Rhodes, James R.


Brotherton, Michael
Hutchison, Michael Clark
Rhys Williams, Sir Brandon


Buchanan-Smith, Alick
James, David
Ridley, Hon Nicholas


Budgen, Nick
Jenkin, Rt Hon P. (Wanst'd&amp;W'df'd)
Ridsdale, Julian


Burden, F. A.
Jessel, Toby
Roberts, Michael (Cardiff NW)


Chalker, Mrs Lynda
Johnson Smith, G. (E Grinstead)
Roberts, Wyn (Conway)


Clark, Alan (Plymouth, Sutton)
Johnston, Russell (Inverness)
Rossi, Hugh (Hornsey)


Clark, William (Croydon S)
Jopling, Michael
Rost, Peter (SE Derbyshire)


Clarke, Kenneth (Rushcliffe)
Kaberry, Sir Donald
St. John-Stevas, Norman


Cooke, Robert (Bristol W)
King, Tom (Bridgwater)
Scott-Hopkins, James


Corrie, John
Knox, David
Shaw, Giles (Pudsey)


Costain, A. P.
Lamont, Norman
Shaw, Michael (Scarborough)


Dean, Paul (N Somerset)
Langford-Holt, Sir John
Shelton, William (Streatham)


Douglas-Hamilton, Lord James
Le Marchant, Spencer
Shepherd, Colin


Drayson, Burnaby
Lewis, Kenneth (Rutland)
Shersby, Michael


Durant, Tony
Lloyd, Ian
Sims, Roger


Eden, Rt Hon Sir John
McCusker, H.
Smith, Cyril (Rochdale)


Edwards, Nicholas (Pembroke)
Macfarlane, Neil
Smith, Dudley (Warwick)


Elliott, Sir William
Macmillan, Rt Hon M. (Farnham)
Smith, Timothy John (Ashfield)


Eyre, Reginald
McNair-Wilson, M. (Newbury)
Spence, John


Fairgrieve, Russell
Marten, Neil
Sproat, Iain


Farr, John
Mather, Carol
Stanley, John


Fell, Anthony
Maude, Angus
Steel, Rt Hon David


Fletcher, Alex (Edinburgh N)
Mawby, Ray
Steen, Anthony (Wavertree)


Forman, Nigel
Maxwell-Hyslop, Robin
Stradling Thomas, J.


Fowler, Norman (Sutton C'f'd)
Miller, Hal (Bromsgrove)
Taylor, Teddy (Cathcart)


Gardiner, George (Reigate)
Mitchell, David (Basingstoke)
Temple Morris, Peter


Glyn, Dr Alan
Molyneaux, James
Thatcher, Rt Hon Margaret


Goodlad, Alastair
Montgomery, Fergus
Thorpe, Rt Hon Jeremy (N Devon)


Gow, Ian (Eastbourne)
Moore, John (Croydon C)
Townsend, Cyril D.


Gower, Sir Raymond (Barry)
Morrison, Charles (Devizes)
Wakeham, John


Grant, Anthony (Harrow C)
Morrison, Hon Peter (Chester)
Warren, Kenneth


Gray, Hamish
Mudd, David
Weatherill, Bernard


Grimond, Rt Hon J.
Nelson, Anthony
Whitelaw, Rt Hon William


Grist, Ian
Newton, Tony
Young, Sir G. (Ealing, Acton)


Hamilton, Michael (Salisbury)
Nott, John



Hampson, Dr Keith
Oppenheim, Mrs Sally
TELLERS FOR THE AYES:


Hannam, John
Page, John (Harrow West)
Mr. John MacGregor and


Harrison, Col Sir Harwood (Eye)
Page, Rt Hon R. Graham (Crosby)
Mr. John Cope.


Havers, Rt Hon Sir Michael






NOES


Allaun, Frank
Davies, Rt Hon Denzil
Hayman, Mrs Helene


Anderson, Donald
Deakins, Eric
Heffer, Erie S.


Archer, Rt Hon Peter
Dean, Joseph (Leeds West)
Horam, John


Armstrong, Ernest
Dempsey, James
Huckfield, Les


Ashley, Jack
Doig, Peter
Hughes, Roy (Newport)


Ashton, Joe
Dormand, J. D.
Hunter, Adam


Atkins, Ronald (Preston N)
Douglas-Mann, Bruce
Jackson, Miss Margaret (Lincoln)


Barnett, Guy (Greenwich)
Duffy, A. E. P.
Jenkins, Hugh (Putney)


Bates, Alf
Ellis, John (Brigg &amp; Scun)
John, Brynmor


Benn, Rt Hon Anthony Wedgwood
English, Michael
Johnson, James (Hull West)


Bennett, Andrew (Stockport N)
Ennals, Rt Hon David
Jones, Alec (Rhondda)


Bidwell, Sydney
Evans, Fred (Caerphilly)
Jones, Dan (Burnley)


Bishop, Rt Hon Edward
Evans, Gwynfor (Carmarthen)
Judd, Frank


Booth, Rt Hon Albert
Evans, Ioan (Aberdare)
Kaufman, Gerald


Bottomley, Rt Hon Arthur
Evans, John (Newton)
Kelley, Richard


Bray, Dr Jeremy
Ewing, Harry (Stirling)
Kerr, Russell


Brown, Robert C. (Newcastle W)
Faulds, Andrew
Kinnock, Neil


Campbell, Ian
Fernyhough, Rt Hon E.
Lamborn, Harry


Cant, R. B.
Flannery, Martin
Lamond, James


Carmichael, Neil
Fletcher, Ted (Darlington)
Litterick, Tom


Cartwright, John
Foot, Rt Hon Michael
Lomas, Kenneth


Castle, Rt Hon Barbara
Forrester, John
Lyon, Alexander (York)


Clemitson, Ivor
Fraser, John (Lambeth, N'w'd)
Lyons, Edward (Badford W)


Cocks, Rt Hon Michael (Bristol S)
Garrett, John (Norwich S)
MacKenzie, Rt Hon Gregor


Cohen, Stanley
Garrett, W. E. (Wallsend)
McNamara, Kevin


Coleman, Donald
George, Bruce
Madden, Max


Cowans, Harry
Golding, John
Mallalieu, J. P. W.


Cox, Thomas (Tooting)
Gould, Bryan
Marshall, Dr Edmund (Goole)


Craigen, Jim (Maryhill)
Graham, Ted
Marshall, Jim (Leicester S)


Crawshaw, Richard
Grant, George (Morpeth)
Meacher, Michael


Crowther, Stan (Rotherham)
Grant, John (Islington C)
Mendelson, John


Cryer, Bob
Grocott, Bruce
Mikardo, Ian


Dalyell, Tam
Harper, Joseph
Millan, Rt Hon Bruce


Davies, Bryan (Enfield N)
Harrison, Rt Hon Walter
Mitchell, Austin




Molloy, William
Rodgers, George (Chorley)
Thompson, George


Moonman, Eric
Rooker, J. W.
Thorne, Stan (Preston South)


Morris, Rt Hon Charles R.
Ross, Rt Hon W. (Kilmarnock)
Tinn, James


Morris, Rt Hon J. (Aberavon)
Rowlands, Ted
Urwin, T. W.


Mulley, Rt Hon Frederick
Sedgemore, Brian
Varley, Rt Hon Eric G.


Murray, Rt Hon Ronald King
Shaw, Arnold (Ilford South)
Wainwright, Edwin (Dearne V)


Newens, Stanley
Sheldon, Rt Hon Robert
Walker, Harold (Doncaster)


Noble, Mike
Silkin, Rt Hon S. C. (Dulwich)
Watkins, David


O'Halloran, Michael
Silverman, Julius
White, Frank R. (Bury)


Orbach, Maurice
Skinner, Dennis
Whitehead, Phillip


Orme, Rt Hon Stanley
Smith, John (N Lanarkshire)
Wigley, Dafydd


Ovenden, John
Snape, Peter
Willey, Rt Hon Frederick


Padley, Walter
Spearing, Nigel
Williams, Rt Hon Shirley (Hertford)


Palmer, Arthur
Spriggs, Leslie
Wilson, Gordon (Dundee E)


Park, George
Stallard, A. W.
Wilson, William (Coventry SE)


Pavitt, Laurie
Stewart, Rt Hon Donald
Wise, Mrs Audrey


Perry, Ernest
Stewart, Rt Hon M. (Fulham)
Woof, Robert


Phipps, Dr Colin
Stoddart, David
Young, David (Bolton E)


Radice, Giles
Stott, Roger



Richardson, Miss Jo
Summerskill, Hon Dr Shirley
TELLERS FOR THE NOES:


Roberts, Albert (Normanton)
Taylor, Mrs Ann (Bolton W)
Mr. Terry Walker and


Robinson, Geoffrey
Thomas, Dafydd (Merioneth)
Mr. Roderick MacFarquar.


Roderick, Caerwyn
Thomas, Ron (Bristol NW)

Question accordingly negatived.

QUESTIONS TO MINISTERS

Mr. Faulds: On a point of order, Mr. Deputy Speaker. I tabled for answer on 3rd April a Question in the following terms:
To ask the Secretary of State for Education and Science whether, following the laying before Parliament of Class X of the Supply Estimates for 1978–79, she will specify the details of the breakdown in distribution of the additional £1 million made available to assist with the preservation of the national heritage which she announced on 26th October 1977.
I received an answer on that day which read,
I must ask my hon. Friend to await the laying before Parliament of the Supply Estimates in a few days' time."—[Official Report, 3rd April 1978; Vol. 947, c. 53.]
I raise this matter because that answer is wrong in fact. The Estimates were actually laid in Votes and Proceedings on 23rd February 1978, a copy of which I have in my hand. Those Supply Estimates include Class X. Because of the printers' strike, they were not available to the House in printed form.
The Answer is also wrong in principle, because how can it possibly be right that these figures are kept from the House when the parties concerned have the figures and the moneys made available to them from 1st April? One of the galleries concerned has already announced its intention of disbursing some of the moneys for a particular painting that it wants for its collection. If the parties concerned know the figures,

why should we in Parliament be deprived of them? This is where the terms of the answer are so unsatisfactory—apart from being wrong in fact.
Those of us wishing to put a malicious interpretation on this Answer—and I hope that there are not many of us—would, perhaps, accept the printers' strike as an excuse for not letting the House have these figures, except that the parties already have them, but there could be a more malicious interpretation.
I have a Press notice from the Department that is an invitation to a Press conference. It reads:
You are invited to attend, or be represented at, a Press Conference to be given by Lord Donaldson, Minister for the Arts, at 4 p.m. on Thursday 6th April 1968 at the above address
—that is, the Department of Education and Science—
on the Supply Estimates for the Arts and Museums in 1978–79.
The notice goes into some detail about what will happen there.
I raise this matter because not only have I been given a factually incorrect answer but it is obviously obfuscatory in intention, and this could not possibly be anything other than an abuse of the procedures of the House. It is on this ground that I raise the matter with you, Mr. Deputy Speaker.

Mr. Deputy Speaker (Mr. Oscar Murton): I have heard what the hon. Gentleman has said. I dispute that it is a point of order at all and it is certainly not a matter for the Chair.

Orders of the Day — WALES BILL

[6TH ALLOTTED DAY]

Considered in Committee. [Progress, 4th April.]

[Mr. OSCAR MURTON in the Chair]

Clause 43

PAYMENTS OUT OF WELSH CONSOLIDATED FUND

Question proposed, That the clause stand part of the Bill.

4.34 p.m.

Mr. Francis Pym: The Committee will be extremely disappointed that, through no fault of its own, we have lost one hour of the time available under the timetable for today. It means that we shall have rather less than one and half hours to consider 15 or 16 clauses and one schedule. This is absolute nonsense and a parliamentary farce. I regret it very much, but we must do the best we can in the circumstances.
The financial provisions of the Bill were criticised yesterday in many ways from all sides, and the Committee was extremely disappointed by the replies it received. Indeed, there were no answers to some of the questions that were asked by hon. Members from both sides of the Committee.
The Minister of State, Treasury, had an uncharacteristic lapse yesterday. Perhaps it was caused by the shock of his first plunge into the iced water of devolution. He certainly gave the impression of a lack of understanding of what the almost continuous debate on devolution is all about, but no doubt he has begun to remedy that this morning.
I should like to return to a point which was raised yesterday by my hon. Friend the Member for Pembroke (Mr. Edwards), who said:
I am not clear where the Bill says that money transferred from the loans fund to the Consolidated Fund can still be used only for loans fund purposes.

He had asked that question previously, and the Minister replied:
The hon. Gentleman will find the explanation in Clauses 43 to 45 where reservation is made in respect of transfers".—[Official Report, 4th April 1978; Vol. 947, c. 322.]
My hon. Friends and I have looked at this matter again, and we are still not clear about how it is to be cleared up and how it is catered for in the Bill. I hope that the Minister will be able to say something more about it later.
The financial provisions are obviously extremely important, because the Assembly will control the expenditure of public money without at the same time carrying any responsibility for raising it. It was made clear yesterday that, on its own, Wales could not afford devolution. It can afford devolution only if it is paid for on a British basis. It is vital for the Committee to grasp that point, otherwise there is a risk of dangerous misunderstandings arising which could lead to great disappointments.
Until now, the per capita public expenditure allocated to Wales has been neither questioned nor challenged in England or anywhere else. Good will and good sense have prevailed over what an hon. Member on the Government side has described as a generous arrangement.
If the arrangements in the Bill are not right and if the Assembly in its management of financial matters is not careful, that good will could easily vanish. If public expenditure were allocated strictly on a population basis throughout the United Kingdom, the people of Wales would wonder what the Bill had done to them.
Clause 43, which relates to payments, says:
No payment shall be made out of the Welsh Consolidated Fund except in accordance with credits granted on the Fund by the Welsh Comptroller and Auditor General".
and:
The Welsh Comptroller and Auditor General shall grant credits on the Welsh Consolidated Fund at the request of the Executive Committee".
We therefore come at once to the relationship between the Welsh Comptroller and Auditor General and the Executive Committee. Whatever Clause 19 may say and whatever the words may appear to mean, the Executive Committee will be, in effect, a Cabinet. It will come to be


regarded and treated as such and it will think of itself as such. Its members will think that they speak for Wales, will say that they are fighting for Wales and will represent themselves as the authentic voice of Wales. I believe that the 36 hon. Members from Wales are and should always be the true and effective voice of Wales.
The clause helps to put the Executive Committee in the position that I have stated. It will control the expenditure and hold the money bags which so many people and interests in Wales will, understandably, be after. Without action by the Committee, I do not think that any expenditure will be possible.
The procedure in the clause is for the Executive Committee to make a request to the Welsh Comptroller and Auditor General. That is obviously a highly responsible post, and whoever occupies that office will be a key figure. What is the nature of that office and the status of that official? We have to turn to Clause 51 to discover the answer to those questions.
Clause 51 says:
The Welsh Comptroller and Auditor General shall be appointed by Her Majesty and…may be removed from office by Her Majesty if the Assembly resolves that the Secretary of State be requested to recommend the removal to Her Majesty".
At the outset, therefore, there is a direct connection between the Assembly, led and effectively dominated by the Executive Committee, and the Welsh Comptroller and Auditor General.
The clause says that the Comptroller and Auditor General is to be appointed by Her Majesty, but effectively the appointment will be by the Executive Committee. Certainly, the occupant of that post may be removed from office if the Assembly resolves in that sense. I notice, however, that no specific reason is required to be given as to why or in what circumstances the Comptroller and Auditor General ought or could or might be dismissed or removed from office. It is an absolutely wide open arrangement that, if the Assembly so decides, the Comptroller and Auditor General can be removed from office.
Some more clear reasons should be given as to the circumstances in which

that would be a possible action to take. As Clause 51 is designed, the appointment of the Comptroller and Auditor General is of a political type. I am not saying that it will be made as a political appointment, but it is of a political type and political considerations could come into it.
I should like to know whether the Committee feels with me that the House of Commons ought to have a say in this appointment. Is it right to appoint, to allow to be appointed and to allow to be removed someone in this extremely important and responsible office on the basis laid down in the Bill? I accept absolutely that if all the characters involved, including all the members of the Executive Committee and the Comptroller and Auditor General, are first-class people of the highest integrity, and if good will exists all round, as everybody hopes and wishes, the system will work satisfactorily. Almost any system will operate satisfactorily on that basis. If the Assembly ever comes into existence, we all hope that it will be like that.
Let us suppose, however, that that is not the case. No one would claim that the people of Wales are paragons of virtue. I do not think that anybody has claimed that, not even the Welshmen themselves. [Hon. Members: "They would."] I observe that there are quite a number of hon. Members who are challenging that and raising doubts about it. However, we are legislating in the Bill for a major constitutional change. Surely, we must do so and prepare ourselves for all kinds of circumstances and eventualities that may arise. We cannot simply legislate on the basis that everybody will do the right thing and be highly responsible. We have to legislate in a way which takes care of all possibilities, whether they are likely to occur or not. The Committee will therefore want to hear how the architects of this unwanted Bill visualise the procedure in Clause 43 working in practice.
There is bound to be enormous pressure and heavy demand upon the Executive for the expenditure of money. Many of the issues to be argued about come down to money in the end. That is what people want in order to fulfil their desires and ambitions. It is important, therefore, to ensure that the arrangements for the payments of moneys as laid down in


the Bill are correct and that the control of expenditure is as tight as it can be.
The Committee will want to be satisfied that the arrangements proposed are adequate and that the relationship between the Executive Committee and the Comptroller and Auditor General is correct and proof against any improper interference.

Mr. Tam Dalyell: The speech of the right hon. Member for Cambridgeshire (Mr. Pym) proves yet again how unsatisfactory it is that many clauses in the Bill can go undiscussed. Had we succumbed to the temptation to let this go and go on to more important matters, many of the issues would not have been raised. There are a great many problems under the mantles of other clauses that have gone undiscussed.
As I intend to make what might be thought to be some extreme assertions to the effect that the setting up of a Welsh Comptroller and Auditor General is a resounding nonsense of a proposal, I had better state my credentials to the Committee.
From 1963 to 1966 I was a member of the Public Accounts Committee of the House of Commons, serving under three chairmen—my right hon. Friend the Member for Huyton (Sir H. Wilson), Lord Houghton of Sowerby and Lord Boyd-Carpenter. I think that they would concede that I have taken a keen interest in the work of that Committee. I was well tutored by the then Comptroller and Auditor General, Sir Edmund Compton. For the last two years I have been Vice-Chairman of the European Parliament Control Committee on Budgets, which is the embryo equivalent of the PAC, looking at how the Commission spends its money. I say this because I am asking hon. Members to take it from me that I know something of what I am talking about.
4.45 p.m.
To hive off one part of the Exchequer and Audit Department to Edinburgh and a lesser and somewhat different part of it to Cardiff is a ludicrous proposition if the criteria are to be connected with the efficiency of the work of the Department. Heaven knows, it is difficult enough a task to conduct a meaningful audit in the complexities of a modern State. To

make the task more difficult by setting up mini-audit departments in Cardiff and Edinburgh with unclear demarcation boundaries of who is responsible for what is frivolous for any Government concerned with keeping public expenditure under control. I am glad to say that my hon. Friend the Minister of State was making a note when I mentioned unclear demarcation boundaries. If he can persuade us otherwise, he will have helped his case, and it is a very important point that must be answered.
I have a question to ask. Like the right hon. Member for Cambridgeshire, I am being as quick as possible because we have other matters to deal with. I ask a question of which I give the Minister of State notice. It might have been possible to answer it off the cuff. Has Sir Douglas Henley, the present Comptroller and Auditor General, or any of his predecessors in the job of Comptroller and Auditor General, been consulted about the break-up of this audit department? If so, what was their opinion? If they have not been consulted, why is this so?

Sir Raymond Gower: Is it implicit in the argument of the hon. Member for West Lothian (Mr. Dalyell) that if Assemblies are set up in Edinburgh and Cardiff he could consider that a better system would be to retain the central Comptroller and Auditor General's Department as it is now and reconcile that with the existence of the two Assemblies?

Mr. Dalyell: That is not a question that I am qualified to answer, but it is a real question about precisely what the costs will be of breaking up the present Exchequer and Audit Department.
I ask a further question. What does this arrangement cost over and above the present arrangement, first of all in money terms and, secondly, in skill? The training and salaries of extra auditors at this level are not matters to be taken lightly.
On 9th January 1978, during the debate on the report of the Public Accounts Committee, I asked in my original speech—reported at col. 1389—for Treasury thinking about the establishment of a Scottish Public Accounts Committee:
Where will the expertise come from to form a Scottish Comptroller and Auditor General's


Department? We who have served on the Public Accounts Committee know that considerable skill and expertise reside in this Department. Where will it come from? I see that the Chairman of the PAC is approving my question.
At that point the right hon. Member for Taunton (Mr. du Cann) nodded his head vigorously. A reply came from my right hon. Friend the Financial Secretary to the Treasury, who said:
It will come as no surprise to my hon. Friend to hear that these matters have not been determined in full. There are many aspects of the operation, following the setting up of the Assembly in Edinburgh, which will be the subject of further determination, and which will not necessarily be detemined well in advance. Detailed discussions of these matters will continu."—[Official Report, 9th January 1978; Vol. 941, c. 1389.]
I returned to the subject on 10th January during the discussion of the Scotland Bill. I will spare the Committee all that I said about it in that speech, but I have to say that all that my hon. Friend the Minister of State, Privy Council Office could do in winding up was to spend time telling me that I had a vivid imagination but, alas, there was no answer to any of what I considered to be perfectly sensible questions.
What has happened in the meantime, since early January, about these discussions? For example, where is the Comptroller and Auditor General to come from? Is he, presumably, to come from the existing Comptroller and Auditor General's Department? Is he to be one of several of the existing auditors?
There is also the question of transfer from one audit department to another. The hon. and learned Member for Cleveland and Whitby (Mr. Brittan) cannot laugh at this, because if the Exchequer and Audit Department is to be responsible to Assemblies in Edinburgh and Cardiff presumably it will have a somewhat different promotion structure. We should at least be told whether the new arrangements come within the existing Audit Department.

Mr. Leon Brittan: Far from laughing at the hon. Member, I was smiling in admiration at his ability to disclose what lay under the manholes that he describes.

Mr. Dalyell: I am sorry if I misinterpreted the hon. and learned Member's smile.
This question occurs in relation to Clause 52(2) which reads:
There shall be paid to or in respect of a person who ceases to hold office as Welsh Comptoller and Auditor General such amounts by way of pensions, allowances or gratuities or by way of provision for any such benefit as the Assembly may from time to time determine.
That would seem to indicate that we are dealing with a different organisation and a separate career structure. It seems that the Government have hived off a different department from the existing Exchequer and Audit Department. The question of transfer is therefore relevant.
The next issue that this raises is whether this mini-department will have the expertise that is available to the existing Exchequer and Audit Department. Hon. Members who have served on the Public Accounts Committee know that within the department there are whole ranges of expertise and specialisation. An all-round auditor is something of the past. To be effective requires specialist auditors. I cannot imagine the whole range of specialities being available to another audit department in Edinburgh and yet another audit department in Cardiff. Any hon. Member who has served on the Public Accounts Committee knows that the range of skills necessary for different matters is considerable.
In 1973–74 the Public Accounts Committee discussed the improvement of the Taff Vale Road. The following year it dealt with the hospital laundry service in Wales. Of course, in addition many issues were covered by the PAC which related both to England and Wales. The accounting officer from the Welsh Office is therefore sometimes summoned with the accounting officers of, say, the DHSS, the Department of the Environment or the Department of Transport for discussions of topics of common interests. In these situations will the expertise available to the Exchequer and Audit Department be made available after the Assembly is set up to deal with specific Welsh problems which might arise, such as those dealt with by the PAC? What will happen, for example, on matters that effect Wales when the accounting officer comes from the DHSS? Like my hon. Friend the Member for Bedwellty (Mr. Kinnock), I am not against change, but I am against half-baked change, and I have the very strong impression that that


is what we are here embarking upon. Certainly these issues had not been properly thought out by 10th January.
I am still puzzled about the status of the Executive Committee. Will it be a Cabinet? Will it be an executive committee of the majority party? Is there to be some kind of a Chancellor of the Welsh Assembly Exchequer? If so, does he not need his own Treasury expertise if this arrangement is not to be, as we were assured yesterday by Ministers it would not be, glorified local government? We were rebuked for making that suggestion yesterday. If there is no Chancellor of the Welsh Exchequer, who will decide on priorities? We cannot tell from the vagueness of the statements describing the Executive the form it will take.
Presumably the Executive will determine its priorities within a given sum. But has it not occurred to my hon. Friend the Minister of State and to a number of my other hon. Friends that when it is stated that the Assembly will be more sensitive in determining priorities within a given sum that is by implication a damning indictment of my right hon. and hon. Friends in the Welsh Office. It is an indictment that I would not have the impertinence to make—the suggestion that they are so out of touch that they do not know the priorities and that the Assembly would be in much closer touch with the priorities than they are. As far as I know every Welsh Minister has his home in Wales and goes back there every weekend. In those circumstances it is fanciful to suggest that the priorities established by my right hon. and hon. Friends are so wrong that the creation of an Assembly is justified to alter them. At best an Assembly can only tinker, but for the whole panoply of an Assembly to be used to alter priorities seems fanciful.

Mr. Geraint Howells: I have listened with interest to the hon. Member's speeches over the last few days. Will he explain whether his remarks mean that he is in favour of devolving power to the people of Wales but not to the people of Scotland?

Mr. Dalyell: No, I am in favour of bringing decisions closer to the people, but I think that it can be done quite adequately by local government. I would not have the impertinence to

suggest how it could be done through local government in Wales, and if that were the issue I would not be detaining the House now. But we are discussing the setting up of a subordinate Parliament, and that concerns every hon. Member.

The Minister of State, Treasury (Mr. Denzil Davies): It is not a subordinate Parliament.

Mr. Dalyell: This is where we get into very difficult waters. People have to make up their minds about this matter. If it is not a subordinate Parliament it must be conceded that it is no more than glorified local government.

Mr. Denzil Davies: There are different forms of devolution.

Mr. Dalyell: Then tell us what different forms there are.

Mr. Denzil Davies: My hon. Friend seems to be wedded to existing institutions, and unable to raise his sights beyond the normal kind of Comptroller and Auditor General. He suggests that all we have is a Cabinet and nothing else. There is for him only a subordinate Parliament or a county council. He must understand, however, that there are different forms of devolution. We are discussing here executive and administrative devolution, not legislative devolution.

Mr. Dalyell: I am more and more puzzled about precisely what is proposed. My right hon. Friend the Minister of State is busily doing an excellent job in other directions, but I wish that he could have been present during some of our previous debates.

Mr. Eric S. Heffer: Is not the position that whilst in Scotland this body will be called an Assembly, in Wales many hon. Members, and certainly the Welsh nationalists, will regard it as a Parliament? The Welsh have been told that they are getting an Assembly, but once they get it they will want it to be the same as the Assembly in Scotland. At the moment they do not know what they are getting. It is neither one thing nor the other. Is this not further proof that the whole affair is an absolute shambles?

Mr. Dalyell: I do not want to be drawn further on this matter because the guillotine falls at 6 o'clock and I intend


to be brief. My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) is a member of the national executive committee of the Labour Party. There is one question I have to put concerning the Executive of the Assembly. Some of my hon. Friends are under the happy assumption that there will always be a Labour majority in Wales. Suppose that by some mischance in the far future the Conservatives and the Welsh nationalists constituted a majority. There would then be the difficulties of a coalition. Who would form the coalition with whom? The same applies in Scotland. If we have an Executive with a coalition, and one of the partners—

The Chairman: Order. The hon. Gentleman is dealing with a hypothesis. He must keep in order on the clause that we are discussing.

Mr. Dalyell: I end by saying, Mr. Murton, that I hope that we shall be told something about what is envisaged as regards the nature and working of the Executive.

5.0 p.m.

Sir Raymond Gower: To take up the discussion between the hon. Member for West Lothian (Mr Dalyell) and his colleague the hon. Member for Liverpool, Walton (Mr. Heffer), it would seem that the Assembly is either an embryo Parliament or a form of window dressing. It must be one or the other. The Government have always professed that they are in no way taking something vital out of the government of the United Kingdom. Indeed, they have said all along that they are adding to United Kingdom government.
In this instance we are dealing with payments only out of the Welsh Consolidated Fund. We are not dealing with the Welsh Loans Fund. However, I draw the Minister's attention to the last part of subsection (1), which states:
This subsection does not apply to transfers under Section 42(2) above".
The subsection that we dealt with last night concerned transfers from the Loans Fund to the Consolidated Fund or vice versa. The fact that subsection (1) of Clause 43 does not apply to those transfers highlights the importance of the argument put to the Minister yesterday, and the argument advanced by my right hon. Friend the Member for Cambridgeshire

(Mr. Pym) in his opening remarks today.
I hope that the Minister will give us an answer to the query that has been repeated many times. What is in the Bill to ensure that after transfers have been made the moneys are used for the purposes for which they were originally designed? In other words, loans money should be used for that purpose, and parts of the Consolidated Fund money allocated to capital expenditure should continue to be used for that purpose. The right hon. Gentleman has not answered that query, which has an added significance when we consider the wording of Clause 43(1).
I agree with my right hon. Friend the Member for Cambridgeshire that the importance of the office of Welsh Comptroller and Auditor General cannot be overstated. It is a notable feature of the clause that deals with the appointment of this officer and, if necessary, his removal from office that it prescribes only how he may be removed. It is said that he may be relieved of office by Her Majesty at his own request. He may be relieved of office by Her Majesty if the Assembly resolves that the Secretary of State be requested to recommend removal. However, it does not provide how he should be appointed. There is merely a reference to appointment by Her Majesty.
The clause does not prescribe whether appointment should be on the recommendation of the Assembly or, at the request of the Assembly, on the recommendation of the Secretary of State. Surely it is as important to prescribe how the appointment should be carried out as to prescribe he should be removed. Surely the manner of his appointment should be described in some considerable detail. I hope that the Minister will take note of that requirement. It may be that under the guillotine procedure we shall not have the opportunity of discussing that matter in the detail that it deserves.
Obviously the appointment is one of tremendous importance. The Welsh Comptroller and Auditor General will be the officer who will issue the credits. He will be the officer who ensures that all the moneys are spent in accordance with the resolutions of the Executive Committee of the Assembly.
I ask the Minister what I believe to be a pertinent question that takes up the


remarks of the hon. Member for West Lothian. The hon. Gentleman discussed the disadvantages of having subsidiary Comptrollers and Auditors General for Scotland and Wales. If we are to have separate Assemblies in Scotland and Wales, and perhaps separate Assemblies in the regions of England in future, is it not possible to retain the United Kingdom Comptroller and Auditor General for all the Assemblies? Is there any necessity to have separate Comptrollers and Auditors General? Is it necessary to divide the expertise or, in some cases the lack of it?
I submit that there is no valid reason for having separate Comptrollers and Auditors General as prescribed in the two Bills. There is a perfectly respectable and good reason for retaining the United Kingdom system of the Comptroller and Auditor General, who would have much more experience. It would be valuable for the new Assemblies to be able to rely on the accumulated experience of the United Kingdom Comptroller and Auditor General and his Department.
I hope that the Minister will reconsider this feature of the Bill. I hope that he will consider the possibility of not having separate Comptrollers and Auditors General. That in no way destroys the Bill or lessens its effectiveness. I hope that the Minister will accept that I am making a constructive suggestion. I believe that it could improve the service that would be available to the Assemblies from the Comptroller and Auditor General. That is one of the issues that arises from the wording of the clause. I hope that the Minister will be able to give us some clear answers to our queries.

Mr. Ian Grist: My hon. Friend the Member for Barry (Sir R. Gower) and the hon. Member for West Lothian (Mr. Dalyell) are quite right to query the necessity of having separate Comptrollers and Auditors General. Clearly these separate officers are part of the panoply of having separate Parliaments. Their provision will be further proof of the separate nature of the Assemblies away from the House of Commons. That is really what we are discussing, although in Clauses 43 and 45 we are meant to be detailing the forms of expenditure. Of course, that is all that the

Welsh Assembly will be able to do as its form is proposed. It will be able only to spend.
As we found yesterday, the Assembly will have no power to raise its own money. Therefore, the guts of the issue is how it will be allowed to spend the money that the House of Commons votes for it? That in turn will be the real issue of the referendum that will come should the Bill be passed by both Houses of Parliament. It will be the expectations that are built up over Clauses 43 and 45 that will be the guts of the referendum. Apparently, the money that this place votes will be voted willy-nilly, voluntarily and readily. We heard yesterday just how readily it will be voted during the remarks of the hon. and learned Member for Montgomery (Mr. Hooson). It seems that more houses will be built, more schools and all the other factors that will be put before the Welsh peopel as reasons for them to vote "Yes" in a referendum.
That is all to do with the expenditure side of the Assembly. There will be no odium in its having to raise money so it will be able to promise to do what it especially favours on the expenditure side. What power will Members of Parliament have over the expenditure? We shall be those who will vote the money for the expenditure, but what power or say will we have over the way in which the money is spent? It is quite clear from the clause that we shall have no power or say.

Mr. D. E. Thomas: Is not that precisely analogous with the position of local government and this place, whereby we in the House of Commons approve a rate support grant order and the money is spent on education, social services and housing, for example, by local authorities? That is spending for which we have no direct responsibility.

Mr. Grist: When the referendum comes, I shall be interested to see whether the hon. Gentleman compares the Welsh Assembly, and what he hopes to see it grow into, with a local authority. I suspect that he will be putting it forward as a national body and a first step towards an independent Wales.

Mr. Thomas: The hon. Gentleman has misunderstood me. I was not comparing the Welsh Assembly with a county council or district council. I was saying that


we in this place approve money for spending by local authorities in precisely the same way as we shall approve money when the Assembly is established. When the money is voted, it will be for the Assembly to decide its priorities within Wales.

Mr. Grist: I think that the hon. Member misunderstands the way in which the money is voted by the House of Commons for all the local authorities within the United Kingdom. It is then distributed through all the various local authorities, be they in England or in Wales, in which we all have a say. Once the money in this particular Assembly has been voted, with English money and English votes, we shall have no say. Nor will the English have any say. There is an entirely different aspect, to which we shall be coming after 6 o'clock this evening, to discuss just what is the difference between a local authority and the way in which the House of Commons deals with the local authorities, and the way in which it is proposed that we should deal with the Assembly.
We shall be in a position of merely supplying the money for this particular expenditure under Clause 43. If we disagree with the way in which the Assembly proposes to spend money, we shall be in the wrong. Whatever the Assembly's proposal is, we shall be told "This is the demand of Wales. This is the requirement of Wales", and this will be said by a body that will have all the prestige and all the standing of a national body. We shall be outnumbered, as Welsh Members of Parliament. If English Members of Parliament choose to oppose it, they will be told that they are denying Wales. If Welsh Members of Parliament oppose it, they will be told in certain quarters—let there be no mistake about this—that they are traitors to the interests of Wales.
If Welsh Members agree with the proposals of the Assembly to spend the money as proposed, what then? We are just messenger boys carrying the message of the Assembly. It will not be our decisions on the way in which money is spent. We shall be sent here essentially in order to argue the case for the Assembly to spend the money as it wishes.

Mr. Dafydd Wigley: Will the hon. Member give way?

Mr. Grist: No. We have only about 50 minutes to go on this clause.
Getting the money will be about the only real power that a Welsh Member of Parliament will have. It will be one of the essentials for a Welsh Member of Parliament—to come here to get the money to be spent under Clauses 43 and 45. Apart from interfering in foreign affairs, and defence, that will be the major power that we shall have.
Yesterday the hon. Member for West Lothian (Mr. Dalyell) gave thanks that there was a Treasury Minister to reply to this particular debate on the financial provisions. He was sorry that the same thing had not occurred during the debates on the Scotland Bill. But the Minister of State, Treasury is not sitting here merely as a Treasury Minister. He is sitting here as a Welsh Member of Parliament.
If we have an Assembly, how many Members of Parliament from Wales will be able to sit as Treasury Ministers—not just on the Front Bench, say, but as Treasury Ministers? There will be an annual argument over the money for the Assembly and the expenditure by that Assembly of that money. If the Minister of State does not believe me, I would refer him to the consultative document, sections of which must have been written by his Department, and to the proposals for a block grant and the expenditure of a block grant by elected Executive Committees. In that document it was pointed out that this would have a very dangerous effect on the management of the economy of the United Kingdom.
How could a Welsh Member of Parliament who had to deal with the block grants, and the effects that the expenditure of those block grants might have on the management of the economy of the United Kingdom, be able to come to the House of Commons as a Welsh Member and lay down the policies of his Government that were contrary to what the Welsh Assembly might well be wishing to do? I should like to know the Minister's opinion on that section of the consultative document and on the effects of the block grant on the management of the economy.
I am sorry that the hon. Member for Bedwellty (Mr. Kinnock) is not present today. During the debates on the Scotland and Wales Bill he said that devolution made nationalists of us all. That, of course, is the truth of the matter.
I hope that the Government Front Bench notice the hilarity on the Plaid Cymru Bench. Plaid Cymru Members know this: establish the Assembly, establish the spending power of the Assembly, make sure that it does not have the odium of raising the money, and all the argument will be to spend more under Clause 43 and grant more under Clause 45. They know that the one body standing in the way of the power to spend money, as we all want in our constituencies and in our interests, will be this House.
Who will get the major blame for that from the nationalists and the electorate of Wales but the local Welsh Members of Parliament sent to this place in order to gain money not for purposes that they can oversee or for the purposes that they want to spend, but in order that the Assembly, which may not be at all of the complexion that they want, can spend it in the way in which the Assembly wants.

5.15 p.m.

Mr. Ioan Evans: The question of the need to appoint a separate Welsh Comptroller and Auditor General is something on which I hope that we shall have a reply from my right hon. Friend, because there has been a big argument in Wales about whether there should be a separate Civil Service to cater for the Assembly or whether it should remain a part of the British Civil Service. I think that the general feeling is that the people employed by this Assembly—if we ever get one—and I think that it is very doubtful that it will be voted for in a referendum—

Mr. Wigley: Oh!

Mr. Evans: We shall see. No doubt we shall get a lot of letters calling for it, but as one editorial says today, that is the dirty tricks department of the nationalist party writing them, so that does not really reflect the opinion of Wales. The people of Wales will decide whether they are to have an Assembly.
But there is the argument that the people employed by the Assembly should

be part of ale British Civil Service. I wonder, therefore, why there is this move to create a separate Welsh Comptroller and Auditor General. One would have thought, in fact, that if the moneys are to be allocated from the national fund to the Assembly, it would not be a bad thing for the same group of people, the people who are deciding on the amounts, to be not only auditing the sending of the money but overseeing the disbursement of that money.
As the purpose of the Bill is to maintain the unity of the Kingdom, surely the people dealing with the auditing should be the same as those dealing with the disbursement as well as sending the money from this place. I should have thought that that would be a better move.

Mr. D. E. Thomas: Is the hon. Member aware of the existence of district auditors?

Mr. Evans: Yes, of course. The point is that what we are talking about now is the question of allocations of funds from this body to another body, and as it is not a separate fund-raising organisation, and will be using funds from this body, there is in this case no need to have a separate Comptroller and Auditor General. That is the point that we are making.

Mr. Tom Ellis: Is my hon. Friend aware that this body also sends funds to the EEC, which has found it necessary to establish its own court of auditors, which is, in effect, the same thing as a Comptroller and Auditor General?

Mr. Evans: I should have thought that the difference between a Welsh Assembly and the EEC was so obvious that it did not need to be stated. That example is completely irrelevant. That is where nine nations have come together to create a new and separate Parliament that will be directly elected and of which we are only a part.
But what we are being told by the Front Bench is that the Assemblies that we are creating in Wales and in Scotland are very much a part of this body, and that this is being done to unify the Kingdom and not to break away. The point has been made, and I should like an explanation.
However, the more important point is that we are dealing with Clause 43.

Mr. Denzil Davies: Are we?

Mr. Evans: Yes. I am glad that my right hon. Friend is aware of that. Clause 43 deals with payments out of the Welsh Consolidated Fund, but it is a later clause, Clause 46, which talks about payments into the fund. I should have thought that technically we would have put payments into the fund first, before talking about payments out of it.

Mr. Timothy Raison: Carrying the hon. Gentleman's point further, does he agree that it is interesting that the wretched Welsh Comptroller and Auditor General is not established for several more clauses to come, so the whole sequence seems to be cockeyed?

Mr. Evans: To further this point, one does not know how the way in which the clauses flow into the Bill has been arrived at.
I return to my point about payments into the fund before we start allocating money. What will be the basis for the allocation of the funds to the Welsh Consolidated Fund? This is a vital question, the answer to which we and the people should know before the people determine whether there should be an Assembly.
For the House of Commons, there are certain criteria for public expenditure. The criteria for public expenditure for the length of and breadth of Britain—from Land's End to John o'Groats—is laid down by the House of Commons. The purpose of creating an Assembly is that there should be different criteria for Wales. We feel that more should be spent on housing in Wales. It could be argued that we spend more on education in Wales than in other parts of the United Kingdom. There is now a desire for an equality of standards throughout Britain.
What will happen when there is an Assembly? The whole ethos of the Assembly is to create different standards. We are told that an Assembly will be better able to determine where money is spent than can the House of Commons. We are told that the Assembly is better able to decide whether to spend the money on education or on roads. If that is to

be the case, we are moving into a new era where the amount of expenditure required will raise important and vital questions. Obviously we shall be in conflict because whatever is given to the Assembly will never be sufficient.
We are always arguing for money to be spent to improve the social services, but we have to balance that with taxation. In the Budget on Tuesday the Chancellor of the Exchequer will announce changes in public expenditure and explain how certain taxes are to be raised. That will give us the whole picture. But we are creating an Assembly that will not be concerned with raising money. Its only method of raising money will be to come to the House of Commons and ask for an increase in the block grant. The question of raising the money will not arise. What will be the basis on which the Government will allocate the amount from the national Consolidated Fund to the Welsh Consolidated Fund? We should have some answer about those criteria at this stage of the argument.

Mr. Wigley: I have never heard so much nonsense about Clause 43 as that expressed by the hon. Member for Aberdare (Mr. Evans). I can understand those hon. Members who are opposed to the concept of a Welsh Assembly in total. I disagree with them, but I can understand them. But if there is to be an Assembly and if it is to have any function whatsoever, inevitably it must be involved with finance. If it is involved with finance it is a nonsense to contemplate that it can do that without a Welsh Comptroller and Auditor General or the equivalent.
Like the hon. Member for West Lothian (Mr. Dalyell), I have an interest. I was a controller on the industrial side and I had a large involvement in auditing before coming to the House. The analogy in a multi-layer company having an auditing and controlling function at plant level is apt in this context in that funds are generated at head office and passed out to another locality. To argue that there should not be a controlling and auditing function in an Assembly is to deprive it of one of the main tools needed to do its job. That is because auditing and financial controlling is more than historic accounting. It is the ongoing management of the firm and the thrust of the finance at the disposal of the


Assembly in the right direction. If the Assembly is to be able to control the responsibility placed upon it and is to know and monitor the effects of its expenditures it will need these functions.
I know the argument in favour of a purely external auditing function. But there are many more arguments in favour of having an in-built, internal function for an Assembly or any other body than there are for an outside function.
The hon. Member for Cardiff, North (Mr. Grist) said that there would be a total lack of control and answerability towards these funds. But the reality is that although I and my colleagues do not like it, the hands of the Assembly will be tied by the legislation passed in the House of Commons. That legislation will impose requirements on the Welsh Assembly and therefore the degree of variation of priority will be restricted to a large extent.
A degree of variation is worth having. That variation is needed, not to have different standards, as the hon. Member for Aberdare suggested, but to meet the different needs and priorities that exist in Wales. That is the whole concept behind setting up an Assembly of this nature. There are different priorities and needs, either because of the circumstances in Wales or because of the social aspirations of the people of Wales that can best be answered by a body in Wales which is answerable to the Welsh people and which sees the situation at first hand.

Mr. Ioan Evans: The hon. Member is not arguing against the point that I was making. I was saying that at the moment the allocation is made by the Welsh Office, which is answerable to the House of Commons. What we are doing is creating an Assembly that will determine how the money is to be allocated. We shall have arguments about whether the Eistedfodd grant should be larger or smaller. There will be arguments about whether there should be more bilingual road signs. This will involve public expenditure. My point is that we do not know what the amount will be. We must presume that no more funds will be allocated. They will not be larger than they are at present. If the Assembly decides to spend more money on one service than on another, that must be at

the expense of the other. Therefore, the standards of education, for instance, which are universal now, could be affected.

Mr. Wigley: I accept that, when there is a limited sum, if more is spent on one service, less must be spent on another. But the reason for that might be that there is a need to spend less. One might need less expenditure to improve a service than one would need under a blanket formula covering the whole of the United Kingdom. That is the whole concept behind the Assembly. We can have the finer brush to paint in the picture rather than the broad brush which is applied by the mechanism that covers the whole of the United Kingdom.
In Clause 43, in the arguments about the need for a Comptroller and Auditor General, we are not arguing about the way in which funds are allocated from Westminster to the Welsh Assembly. That matter is dealt with in different clauses. We are arguing about the method of control, the answerability and the internal mechanisms fur the Assembly to ensure that the payments are in line with ifs own programme and to meet its own needs.

Mr. Dalyell: Could the hon. Gentleman give an example of a change in pricrities for the benefit of the people of Wales which is unseen by the three or four Ministers at the Welsh Office and the 36 Welsh Members of Parliament that would be seen by a Welsh Assembly?

Mr. Wigley: Yes. If we had our way and went towards a full Parliament and full self-government we should have different priorities. For example, we should not be spending the extra £400 million on defence. That is a difference in priority. I am refuting what I believe to be a nonsense expressed by those who say that it is only those who are elected to this Chamber who can decide which priorities suit Wales and not the people who are elected to the Assembly in Cardiff.

Mr. D. E. Thomas: Perhaps I can help my hon. Friend. Is my hon. Friend aware that there has been for at least two years a policy under which the Department of Health and Social Security in England has adopted a scheme of joint financing between the National Health Service and the personal social services of local authorities and that this scheme


was not operated in Wales for two years? It was not set up by the Welsh Office. At last the Welsh Office is to begin such a funding, but only at the rate of £200,000 for the first financial year.
Is my hon. Friend aware that had there been a Welsh Assembly it could have decided to have a joint funding scheme between the DHSS and the personal social services earlier than it has. There was resistance from the area health authorities and certain social services departments to this scheme. The Welsh Assembly would have been able to make this type of innovative decision in social policy. That is the kind of switching of resources which would be more effective at the Cardiff level.

5.30 p.m.

Mr. Wigley: Yes, I accept that, of course, and what one hopes is that we shall have more of the innovative role which we are looking for as an advance within the cake at our disposal. We ourselves would like to see much greater control on both sides of the financial equation here, but, given that we are to have only expenditure control within the confines of the Bill, it is vital that the right mechanisms for control of that expenditure be set up, because, if they are not, we shall be back into the worries which have been expressed by certain hon. Members on the Government Benches to the effect that there is inappropriate and insufficient control over vital aspects of public expenditure.
To delete this part of the Bill would be to fall into the very problems which have been argued by certain hon. Members opposite who oppose the Welsh Assembly.

Mr. Neil Kinnock: The hon. Gentleman emphasises the need for greater sensitivity in recognising and meeting Welsh needs, and I entirely agree there. But is he not aware of the view expressed by several local authorities that, because of the authority which will be vested in the proposed Assembly, the purposes which they have identified and seek to meet on a local community basis will be impeded or even eroded altogether by the superimposition of a Welsh national body deciding priorities?
Secondly, the hon. Gentleman spoke earlier of the way in which resources could be shifted. Within the group of powers

and functions over which the Assembly will have responsibility, can the hon. Gentleman suggest any single sphere in which we could in Wales afford to spend a halfpenny less?

Mr. Wigley: I am, of course, aware of the representations made by local authorities, particularly county authorities. The representations which I hear from district authorities are somewhat different from those of the county authorities, and they appear to be much more in favour of this proposed body, and seeing the arguments as they are put forward, with the county authorities being against the Assembly and the districts generally in favour, one suspects that there is a degree of motivated self-interest related to the preservation of their own existence.
But I take the point which the hon. Gentleman makes, that the local authorities themselves are capable of determining priorities at local level as they see them, and I accept his argument that the local authorities should have that power, for it is important for them to be able to determine the priorities according to their own lights. I am glad to hear the hon. Gentleman argue that since it will presumably lead, as the hon. Member for Aberdare suggested, to a difference in the meeting of needs or in standards, according to the terminology one uses, since they will determine different priorities.
That is what we are arguing about in the context of an all-Wales assembly. At a higher level there is again this type of differentiation, and what we feel very strongly is that the powers for the Assembly must be powers transferred from the centre out to the Welsh Assembly and not centralised from local authorities to Cardiff or wherever the Assembly meets. Devolution, or decentralisation—"datganoli" is the Welsh word, meaning decentralisation—is about moving power from here to Wales, not about moving power from Gwynedd County Council or Arfon Borough Council to Cardiff. To that extent, it gives the capability of the finer tuning to which the hon. Gentleman referred.

Mr. Kinnock: If we are really talking about datganoli, it is not enough to decentralise from Westminster to the Cardiff Assembly, but the real decentralisation should be for making decisions which


affect people in their everyday lives which they can recognise and can control democratically, and this comes at the local authority level. Does not the hon. Gentleman recognise that the establishment of the Assembly is a centralising gesture because of the power that it will take away from all local authorities, county and local?

Mr. Wigley: That is not so. That may be the fundamental misconception which the hon. Gentleman has harboured all along, and it may explain his opposition to the Bill. There is not a centralising function here. Certainly, Cardiff is taking over certain roles vis-à-vis local authorities which have previously been undertaken by Westminster, but that is not a centralising from local authority to Cardiff, and what we are obtaining here—

The Chairman: Order. We are getting into a geographical argument now, and we ought to be directing our attention specifically to payments out of the Welsh Consolidated Fund.

Mr. Wigley: I take the hint, Mr. Murton. Hon. Members opposite are free to argue and to vote against having an Assembly, both on Second Reading and on Third Reading, but if we are to have an Assembly and if it is to have a meaningful function, that function must be tied up with finance, and, if it is tied up with finance, there must be within its own ambit the functions of a Controller and Auditor General. Otherwise, the whole thing is meaningless.

Mr. Raison: The hon. Member for Caernarvon (Mr. Wigley) has been talking about the relationship between the centre and the locality with reference to financial control, and I wish to develop that point. However, I wish first to echo the words used by my right hon. Friend the Member for Cambridgeshire (Mr. Pym) in opening the debate by saying that I think that the attitude of the Minister of State at the Treasury yesterday was both contemptuous and contemptible. He came to the Chamber looking rather like a lofty Treasury mandarin, which, no doubt, he is, seeming to think that he had been hearing a lot of rubbish the whole afternoon and did not much like it.
The right hon. Gentleman's behaviour was deplorable, and I would much rather

have heard the other Minister of State, his hon. Friend at the Privy Council Office, but I imagine that the reason why he was not rolled out then was that he had had such a depressing visit to Garscadden the day before. Indeed, The Daily Telegraph tells us that he
trotted up and down the graffiti-ridden staircases in Garscadden with dogs and walling children"—

The Chairman: Order. The hon. Gentleman must come away from another part of the United Kingdom and deal with Clause 43.

Mr. Raison: I say only that devolution will not win a single vote for Labour when the by-election comes, and I shall not pursue that.

The Minister of State, Privy Council Office (Mr. John Smith): Even though he may be ideologically in tune with The Daily Telegraph, the hon. Gentleman ought by now to know enough not to believe much that he reads there. That is a total distortion of what happened.

Mr. Raison: I am afraid that I cannot accept that, and I believe the truth to be that the Scotland Bill is completely unloved in Scotland as the present Bill is in Wales. However, as you are about to say. Mr. Murton, we are discussing the financial relationships here, and I wish to pick up what I regard as an important point.
In lines 9 to 12, the clause sets out the circumstances in which the Welsh Comptroller and Auditor General shall grant payments, and he shall not grant them unless any sum
has been charged on the Fund by or under any Act of Parliament, or is part of the sums appropriated for any purpose by an order of the Assembly.
It is important to understand what that means, and in this context I shall refer to an important aspect of economic policy, namely, incomes policy, in order to illustrate what I mean. I am glad that we have a Minister from the Treasury here.
The clause tells us that sums can be granted if there is an Act of Parliament allowing it or if the Welsh Assembly allows it. Under the sort of incomes policy which we have nowadays, the Government do not, by and large, proceed by Act of Parliament but they set the policy out in a White Paper which


may or may not subsequently be presented to the House of Commons for approval. That is the way the Government have chosen to operate during the past year. Sometimes they have chosen to operate without even a White Paper, taking as authorisation, so to speak, a vote of the House of Commons.
The examples which I give to illusstrate that are as follows. There has been the range of incomes policies covered by White Papers and subsequently, in some cases, though only in some, converted into legislation under the 1975 Act, but there is also the question of the contract clauses which are meant to reinforce the incomes policy. Apparently, the Government are simply relying on the fact that a resolution or vote of the House of Commons will give some sort of validity to their actions.
The question I would like to put to the Minister of State is this: "When he is deciding whether it is proper for sums to be paid will the Comptroller and Auditor General rave to pay any regard at all to the national incomes policy of the day?" It is one of the very regrettable facts about both this Bill and the Scotland Bill that the guillotine prevented any discussion of the clauses in which the Government originally wanted the Assemblies to have regard to the national incomes policy.
The Scottish clause was chucked out, and yesterday the Government allowed, without opposition, the Welsh clause about incomes policy to be chucked out. It is a great pity that it was not debated, because there was no chance to discuss the reasons why the clauses were chucked out. Some people liked their being chucked out because they did not want any incomes policy and others because they believed that they were far too weak to enforce an incomes policy. I do not want an incomes policy, but if we have one it must apply to Scotland and Wales. Therefore, if we unfortunately have an incomes policy, it is ridiculous that Scotland and Wales, through their Assemblies, should be exempted from incomes policy.
One of the most astonishing things about the Government's policy is that they should be prepared to say, for example, as I understand it, that the firemen in Scotland or in Wales should have

been allowed to be paid 20 per cent. more when the firemen in England were being paid 10 per cent. more. That is extraordinary. It is now evident that under the Bill the odious contract clauses that the House of Commons has discussed on two occasions would not apply to the Welsh Assembly. If the Government in London are saying to their various agencies "You must insist whenever a contract is given that those who receive it must agree to these incomes policy clauses", is it conceivable or acceptable that the Welsh Assembly should not have to apply the same clauses?

Mr. Wigley: Surely the point is that if one has an incomes policy—and we have great reservations about the sort that we have had—it should preferably be one that has come through a Bill or other legislation in the House of Commons, rather than one that has been working on an ad hoc basis, as we have seen in the recent past. If that is the case, the legislation from here covers Wales anyway—regrettably, from our point of view.

Mr. Raison: I entirely agree with the hon. Gentleman. I entirely accept that if we are to have an incomes policy it should come through a statute. But I have also to recognise that we have by and large a non-statutory incomes policy. This is where the Government have landed us. Unless the Minister of State corrects me, I am sure that I am accurate when I say that the incomes policy provisions operated in England would not, in respect of devolved matters, apply to the activities of the Welsh or Scottish Assemblies.
I ask the Minister of State, who presumably is concerned with national economic policy, how on earth he thinks that that could ever be acceptable or tolerable. Perhaps I should have brought this up on the earlier clauses to do with incomes policy, but they have never been reached, and I think it entirely proper that I should bring it up now.
If you would like me to revert more specifically to the subject matter of the clause, Mr. Murton, may I ask this. Would the Welsh Comptroller and Auditor General when sanctioning or approving these sums of money, or doing whatever it is with them, have to bear in mind the Government's incomes policy,


or would he simply say "The Welsh Assembly can help itself"?
There is one other twist to this which I have half touched on already and which is very interesting and important. The clause clearly says that if the sum of money is granted under any Act of Parliament, it is all right. We all understand that, but, as I have already implied, the present Government do not always proceed by Act of Parliament. They like to proceed by other methods including pushing a vote through the House of Commons, maybe endorsing a White Paper or whatever.
Should the Comptroller and Auditor General take note of policies that have been pushed through the House by a White Paper, or policies such as the one about the contract clauses, to which I have already referred, when the Government, alas, received a majority? Should the Welsh Comptroller and Auditor General pay attention to that, or should he simply be bound very strictly to the letter of what I agree with the hon. Gentleman should properly be the case—in other words, working through the law?
These are very important, fundamental questions in the whole problem of devolution. It would be a travesty of our proceedings if at no stage—as happened on the Scotland Bill—a Minister told us how the Government saw incomes policy operating in the Welsh Assembly situation and the Scottish Assembly situation.

5.45 p.m.

Mr. Wyn Roberts: This point has been troubling me as well. Does my hon. Friend agree that according to one interpretation the Assembly can spend only money which has been approved under or by an Act of Parliament? Nevertheless, there is the other possibility that it may, as Clause 43 says, spend
sums appropriated for any purpose by an order of the Assembly".
But I cannot see that the Assembly can make an order that does not have some backing in an Act of Parliament.

Mr. Raison: My hon. Friend has raised a very important point. I do not think that it is for me to comment on it, because it is an issue of clarification, but I hope that the Minister will pay attention to

that as well as to what I believe to be the very important points that I have made.

Mr. Ian Gow: It is, I think, common knowledge that the Minister of State, Treasury, is no enthusiast for devolution to Wales [HON. MEMBERS: "Oh."] It seems very curious that the right hon. Gentleman should have been wheeled in to deal with this debate, because, particularly at this time of the year, he should have many more important things to deal with.

Mr. Dalyell: My right hon. Friend is, alas, only too enthusiastic.

Mr. Kinnock: May I come to the firm defence of my right hon. Friend. Devolution occupies a place in his heart second only to the fortunes of Llanelli. Rugby Football Club.

Mr. Gow: There is one aspect—[HON. MEMBER: "Withdraw."] I certainly will not withdraw. There is one aspect of Clause 43 to which I wish to draw the Committee's attention. There can be no payment under subsections (2)(a) or (b) unless that payment is made at the prior
request of the Executive Committee of the Assembly".
If there is no request of the Executive Committee, there can be no payment. That seems to me an extraordinary provision.
In Clauses 18 and 19 we find the Committees that are to be set up. We see that the Executive Committees consists of the leaders of the Committees appointed under Clause 18 plus a third nominated by the Assembly. Is it the case under Clause 19 that the one-third members of the Executive Committee who are not leaders of the other committees must be Members of the Assembly? If I read Clause 19 correctly, those one-third who are not there ex officio do not have to be Members of the Assembly.
It seems to me another recipe for potential conflict and the potential unworkability of Clause 43 that there can be no payment out unless there has first been a request from the Executive Committee. I believe that it would be perfectly reasonable to have the approval of the Assembly, which is indeed required, but I cannot see the reason for having to have the prior request of the Executive Committee.

Mr. Denzil Davies: Perhaps I may deal first with a specific question asked by my hon. Friend the Member for West Lothian (Mr. Dalyell), of which he gave me notice, about the mechanism and the operation of the office of Welsh Comptroller and Auditor General. My hon. Friend asked whether the present Comptroller and Auditor General had been consulted. His officials were consulted upon the general mechanism laid down in the Bill, as other Government Departments were consulted in relation to many parts of the Bill. The answer to my hon. Friend's question is that indeed they were consulted, and they advised the Government accordingly.
My hon. Friend also made some interesting remarks about the Public Accounts Committee, of which I had the fortune to be a member for a short time. Indeed, I was fortunate enough to be a member when the vexed subjects of the Taff Vale road and the hospital laundry services of L. G. Jones were discussed. It is a very important Committee, as I am sure my hon. Friend agrees, which plays a very important part in controlling public expenditure.
I was somewhat disappointed by my hon. Friend's conservative attitude towards the kind of Comptroller and Auditor General Department, if it can be so described, that will be set up by the Welsh Assembly. Our PAC and Comptroller and Auditor General do a very good job. Other countries have similar kinds of institution, but sometimes operate them on a different basis. For example, there is a lot to be said for the way in which the French discharge this function. The Americans have a different set-up. My hon. Friend talked of expertise. When one compares our system with some of the Continental systems, especially the French system, one finds, if I may say so without being disrespectful, that in those systems there is as great expertise as, if not greater expertise than, our own.
The Bill, giving the machinery and legislative authority for the setting up of the Welsh Assembly, rightly leaves it to the Assembly to determine the details of the kind of Comptroller and Auditor General's Department that it wants. It is not for me to say, but for the Assembly, but I hope that it will look not only at our example and learn from our experience

but at other legislatures. Indeed, I believe that we in this House can also learn from the way in which other legislatures deal with the problem of financial control.

Mr. Dalyell: May I ask one point of clarification? Is the career structure of the Comptroller and Auditor General's Departments in Edinburgh and Cardiff to be separate from the Comptroller and Auditor General's Department as we know it? Is it to be a separate career structure and organisation?

Mr. Davies: The career structure will be determined as one of the details when the Department is being set up. There may well be a case for having a different career structure. The career structure of the present office is not perfect, as I am sure my hon. Friend agrees. If he has talked, as I am sure he has, with various Comptrollers and Auditors General, he will realise that there is a problem in relation to career structure.
There is also a problem—here I accept what my hon. Friend says—about getting the right expertise for this kind of work. There is not a limitless supply of people qualified to do the kind of in-depth analysis necessary in this kind of situation. So I do not think that the Assembly will be backward—I hope that it will not—in setting up a department able to meet these needs and able to provide the kind of financial control that we all want to see.
My hon. Friend talked about hiving off the office of Comptroller and Auditor-General. It is a case not of hiving off but of setting up a body that will scrutinise the spending of money by the Assembly according to the powers laid down by Parliament. It is not a case of hiving off the work at all. The Public Accounts Committee will still have plenty of work to do, even in relation to Wales, because many functions will remain with the Welsh Office and Ministers will remain responsible to this House and to the PAC.

Mr. Wyn Roberts: Does not the right hon. Gentleman think that there is un-wisdom in having one Comptroller and Auditor General accounting for payments out of a fund and another Comptroller and Auditor General vetting payments into the same fund?

Mr. Davies: Not at all. Two institutions are involved. The House of Commons will continue to have its own Comptroller and Auditor General, who will deal not only with payments into the Welsh fund. The Assembly will pay out money, and it is logical that it should have a Comptroller and Auditor General—the hon. Gentleman can call the office something else if he does not like the Norman French. But, as the hon. Member for Caernarvon (Mr. Wigley) said, their has to be such a person, and we have to call him something. I see nothing unwise about this. Indeed, I think that it is a wise thing to do.
I turn now to the point raised by the right hon. Member for Cambridgeshire (Mr. Pym), who returned to a question which we dealt with yesterday. The hon. Member for Conway (Mr. Roberts) also raised it. It is a valid point. The right hon. Gentleman asked about the money, the credits or debits, which are to be transferred and are to appear in the two different bank accounts—the Welsh Loans Fund and the Welsh Consolidated Fund. The hon. Member for Barry (Sir R. Gower) asked what there was to ensure that the money can be used only for the purposes for which it is granted.
I come back to the provisions in the Bill which make the position clear. Clause 43(2) says:
The Welsh Comptroller and Auditor General shall grant credit on the Welsh Consolidated Fund at the request of the Executive Committee of the Assembly, but shall not grant any such credit for the payment of any sum unless that sum—
(a) has been charged on the Fund by or under any Act of Parliament,
I think that we can disregard that for this purpose because it would be a specific charge as we now have specific charges on the United Kingdom Consolidated Fund. There might be, in certain cases, specific charges, but this has nothing whatever to do with incomes policy, although the hon. Member for Aylesbury (Mr. Raison) seemed to think that it might have. If there is a specific charge, that is an end to the matter.
The wording of subsection (2)(b) is what we are concerned with here. It says:
is part of the sums appropriated for any purpose by an order of the Assembly;

Subsection (2) goes on:
and no sum issued out of the Welsh Consolidated Fund on credits granted under paragraph (a) or (b) above shall be applied for any purpose other than that for which it is charged or appropriated
In other words, the Welsh Assembly cannot appropriate any Consolidated Fund payments except for purposes for which those payments have been paid into the Consolidated Fund. Block grant money cannot be used for anything except block grant purposes. The Assembly can order or ask the Comptroller and Auditor General to make a payment, but he can grant the credit only if he is satisfied that the Assembly is making the payment for the purposes for which the money was allowed. The same applies to the Welsh Loans Fund. There is no question of money being paid for other purposes. It cannot be paid for other purposes without connivance or an attempt not to operate the provisions of the legislation.

Mr. Brittan: If, under Clause 42(2), money has been passed from the Loans Fund to the Consolidated Fund, and it is then to be found in the Consolidated Fund, why is it in any way illegal for the Assembly itself to authorise the expenditure of that money, which is now to be found in the Consolidated Fund, for purposes for which sums in the Consolidated Fund may properly be spent?

Mr. Davies: Because the money in the Consolidated Fund, which is initially put into the Fund for block grant purposes, remains in the ownership of that Fund until the ownership changes, and the only way in which the ownership changes or can be changed is by credit being given and the money being paid out to another party. The ownership of that money does not change merely because the surplus in the Consolidated Fund is reduced and the deficit in the Loans Fund—I put this for the sake of argument—is also reduced. But that is merely a book-keeping transfer between two bank accounts. The character of the money remains the same.
Hon. Members still look surprised. I say to them without commitment that if, as it appears, they are still not convinced, we are prepared to look at this again to see whether it is possible to make it clearer. It is not the purpose of this part of the clause to enable money to be used for other purposes. We are as keen as hon. Members are to ensure that that is


the case. Without commitment, we shall consider what has been said in the debate and whether the provision can be made clearer. I must add, however, that I think that it is clear now, as I am sure hon. Members will agree, on reflection.

Mr. Ioan Evans: My right hon. Friend referred to the appointment of the Welsh Comptroller and Auditor General, but we will not be able to debate Clause 51, relating to that appointment, when we come to it. Subsection (4) of the clause provides that
The Welsh Comptroller and Auditor General shall not be a Member of the House of Commons or of the Welsh or Northern Ireland Assembly.
There is no reference to the Scottish Assembly. Is that because the Scotland Bill is not yet an Act and there will be amending legislation eventually to cover the point?

Mr. Davies: My hon. Friend is right, of course. There is no Scottish Assembly at the moment, so the draftsman could not be expected to draft such a provision. What will happen over the next

few months, however, is another matter. That is why it is drafted in this way. The clause is mainly concerned not with the Welsh Comptroller and Auditor General but with the payments of moneys out of the Welsh Consolidated Fund. It sets out stringent safeguards to ensure that money is used for the purposes for which it is granted. The setting up of a Comptroller and Auditor General strengthens that system. I hope that the Assembly will look at procedures in other countries, because we in this House have a lot to learn about the best way of controlling public expenditure.

I hope that I have dealt with most of the points. I have not covered the incomes policy point, because—

It being Six o'clock, The CHAIRMAN proceeded, pursuant to the Order [16th November] and the Resolution [1st March], to put forthwith the Question already proposed from the Chair.

Question put, That the Clause stand part of the Bill:—

The Committee divided: Ayes 169. Noes 134.

Question accordingly agreed to.

Clause 43 ordered to stand part of the Bill.

The CHAIRMAN then proceeded to put forthwith the Questions necessary for the disposal of the Business to be concluded at Six o'clock.

Clauses 44 and 45 ordered to stand part of the Bill.

Clause 46

PAYMENTS INTO WELSH CONSOLIDATED FUND OUT OF MONEYS PROVIDED BY PARLIAMENT

Question put, That the clause stand part of the Bill:—

The Committee divided: Ayes 167, Noes 136.

Division No. 160]
AYES
[6.00 p.m.


Allaun, Frank
English, Michael
Lamond, James


Anderson, Donald
Evans, Gwynfor (Carmarthen)
Lee, John


Ashley, Jack
Evans, Ioan (Aberdare)
Lestor, Miss Joan (Eton &amp; Slough)


Atkins, Ronald (Preston N)
Evans, John (Newton)
Litterick, Tom


Atkinson, Norman
Ewing, Harry (Stirling)
Luard, Evan


Barnett, Guy (Greenwich)
Faulds, Andrew
Lyon, Alexander (York)


Bates, Alf
Fernyhough, Rt Hon E.
McCusker, H.


Beith, A. J.
Flannery, Martin
MacFarquhar, Roderick


Bennett, Andrew (Stockport N)
Fletcher, Ted (Darlington)
MacKenzie, Rt Hon Gregor


Bidwell, Sydney
Foot, Rt Hon Michael
Mackintosh, John P.


Blenkinsop, Arthur
Ford, Ben
McNamara, Kevin


Booth, Rt Hon Albert
Forrester, John
Mallalieu, J. P. W.


Bottomley, Rt Hon Arthur
Fraser, John (Lambeth, N'w'd)
Marshall, Dr Edmund (Goole)


Boyden, James (Bish Auck)
Freud, Clement
Marshall, Jim (Leicester S)


Brown, Robert C. (Newcastle W)
Garrett, W. E. (Wallsend)
Mellish, Rt Hon Robert


Callaghan, Rt Hon J. (Cardiff SE)
George, Bruce
Mikardo, Ian


Campbell, Ian
Ginsburg, David
Millan, Rt Hon Bruce


Cant, R. B.
Golding, John
Miller, Dr M. S. (E Kilbride)


Carter-Jones, Lewis
Gourlay, Harry
Molloy, William


Clemitson, Ivor
Grant, George (Morpeth)
Molyneaux, James


Cocks, Rt Hon Michael (Bristol S)
Grant John (Islington C)
Moonman, Eric


Cohen, Stanley
Grimond, Rt Hon J.
Morris, Rt Hon Charles R.


Coleman, Donald
Grocott, Bruce
Mulley, Rt Hon Frederick


Cowans, Harry
Harrison, Rt Hon Walter
Murray, Rt Hon Ronald King


Cox, Thomas (Tooting)
Hooson, Emlyn
Newens, Stanley


Craigen, Jim (Maryhill)
Howells, Geraint (Cardigan)
Ogden, Eric


Crawshaw, Richard
Huckfield, Les
Orbach, Maurice


Crowther, Stan (Rotherham)
Hughes, Rt Hon C. (Anglesey)
Orme, Rt Hon Stanley


Cryer, Bob
Hughes, Roy (Newport)
Ovenden, John


Davidson, Arthur
Hunter, Adam
Padley, Walter


Davies, Bryan (Enfield N)
Jackson, Miss Margaret (Lincoln)
Palmer, Arthur


Davies, Ifor (Gower)
John, Brynmor
Park, George


Deakins, Eric
Johnson, James (Hull West)
Pavitt, Laurie


Dean, Joseph (Leeds West)
Johnson, Walter (Derby S)
Pendry, Tom


Dempsey, James
Johnston, Russell (Inverness)
Penhaligon, David


Doig, Peter
Jones, Alec (Rhondda)
Phipps, Dr Colin


Dormand, J. D.
Jones, Dan (Burnley)
Radice, Giles


Douglas-Mann. Bruce
Judd, Frank
Richardson, Miss Jo


Duffy, A. E. P.
Kelley, Richard
Roberts, Albert (Normanton)


Dunnett, Jack
Lambie, David
Robinson, Geoffrey


Ellis, John (Brigg &amp; Scun)
Lamborn, Harry
Roderick, Caerwyn




Rodgers, George (Chorley)
Stewart, Rt Hon Donald
Walker, Harold (Doncaster)


Rogers, Rt Hon William (Stockton)
Stewart, Rt Hon M. (Fulham)
Walker, Terry (Kingswood)


Rooker, J. W.
Stoddart, David
Watkins, David


Rose, Paul B.
Summerskill, Hon Dr Shirley
White, Frank R. (Bury)


Ross, Stephen (Isle of Wight)
Taylor, Mrs Ann (Bolton W)
Whitlock, William


Ross, Rt Hon W. (Kilmarnock)
Thomas, Dafydd (Merioneth)
Wigley, Dafydd


Rowlands, Ted
Thomas, Jeffrey (Abertillery)
Willey, Rt Hon Frederick


Shaw, Arnold (Ilford South)
Thomas, Mike (Newcastle E)
Williams, Rt Hon Shirley (Hertford)


Silkin, Rt Hon S. C. (Dulwich)
Thomas, Ron (Bristol NW)
Wilson, Gordon (Dundee E)


Silverman, Julius
Thompson, George
Wise, Mrs Audrey


Skinner, Dennis
Thorne, Stan (Preston South)
Woof, Robert


Smith, Cyril (Rochdale)
Tinn, James
Young, David (Bolton E)


Smith, John (N Lanarkshire)
Torney, Tom



Snape, Peter
Tuck, Raphael
TELLERS FOR THE AYES:


Spriggs, Leslie
Varley, Rt Hon Eric G.
Mr. Joseph Harper and


Stallard, A. W.
Wainwright, Edwin (Dearne V)
Mr. Ted Graham.


Steel, Rt Hon David
Wainwright, Richard (Colne V)





NOES


Arnold, Tom
Gower, Sir Raymond (Barry)
Nott, John


Atkins, Rt Hon H. (Spelthorne)
Grant, Anthony (Harrow C)
Page, John (Harrow West)


Atkinson, David (Bournemouth, East)
Grist, Ian
Page, Rt Hon R. Graham (Crosby)


Bell, Ronald
Hamilton, Michael (Salisbury)
Page, Richard (Workington)


Bendall, Vivian (Ilford North)
Hampson, Dr Keith
Parkinson, Cecil


Bennett, Sir Frederic (Torbay)
Harrison, Col Sir Harwood (Eye)
Percival, Ian


Benyon, W.
Havers. Rt Hon Sir Michael
Pink, R. Bonner


Berry, Hon Anthony
Hayhoe, Barney
Prentice, Rt Hon Reg


Biffen, John
Hodgson Robin
Price, David (Eastleigh)


Biggs-Davison, John
Holland, Philip
Pym, Rt Hon Francis


Blaker, Peter
Hordern, Peter
Renton, Tim (Mid-Sussex)


Boscawen, Hon Robert
Howe, Rt Hon Sir Geoffrey
Rhodes, James R.


Bottomley, Peter
Hunt, David (Wirral)
Ridley, Hon Nicholas


Brittan, Leon
Hunt, John (Ravensbourne)
Roberts, Wyn (Conway)


Brocklebank-Fowler, C.
Hurd, Douglas
Rossi, Hugh (Hornsey)


Brooke, Peter
Hutchison, Michael Clark
Rost, Peter (SE Derbyshire)


Bryan, Sir Paul
James, David
Royle, Sir Anthony


Buchanan-Smith, Alick
Jessel, Toby
Sainsbury, Tim


Budgen, Nick
Johnson Smith, G. (E Grinstead)
Shaw, Giles (Pudsey)


Burden, F. A.
Jopling, Michael
Shelton, William (Streatham)


Butler, Adam (Bosworth)
Kaberry, Sir Donald
Shepherd, Colin


Chalker, Mrs Lynda
Kimball, Marcus
Shersby, Michael


Clark, Alan (Plymouth, Sutton)
King, Tom (Bridgwater)
Sims, Roger


Clark, William (Croydon S)
Knox, David
Skeet, T. H. H.


Clarke, Kenneth (Rushcliffe)
Lamont, Norman
Smith, Dudley (Warwick)


Cooke, Robert (Bristol W)
Lloyd, Ian
Smith, Timothy John (Ashfield)


Costain, A. P.
Luce, Richard
Speed, Keith


Douglas-Hamilton, Lord James
Macfarlane, Neil
Spence, John


Drayson, Burnaby
MacGregor, John
Stanbrook, Ivor


Dunlop, John
McNair-Wilson, M. (Newbury)
Stanley, John


Dykes, Hugh
McNair-Wilson, p. (New Forest)
Steen, Anthony (Wavertree)


Eden, Rt Hon Sir John
Marten, Neil
Stradling Thomas, J.


Edwards, Nicholas (Pembroke)
Mather, Carol
Tebbitt, Norman


Elliott, Sir William
Maude, Angus
Temple Morris, Peter


Eyre, Reginald
Mawby, Ray
Thatcher, Rt Hon Margaret


Fairgrieve, Russell
Maxwell-Hyslop, Robin
Trotter, Neville


Farr, John
Meyer, Sir Anthony
Vaughan, Dr Gerald


Fell, Anthony
Miller, Hal (Bromsgrove)
Viggers, Peter


Fletcher, Alex (Edinburgh N)
Mitchell, David (Basingstoke)
Warren, Kenneth


Forman, Nigel
Monro, Hector
Weatherill, Bernard


Fowler, Norman (Sutton C'f'd)
Montgomery, Fergus
Wood, Rt Hon Richard


Fraser, Rt Hon H. (Stafford &amp; St)
Moore, John (Croydon C)
Young, Sir G. (Ealing, Acton)


Gardiner, George (Reigate)
Morrison, Charles (Devizes)



Gardner, Edward (S Fylde)
Morrison, Hon Peter (Chester)
TELLERS FOR THE NOES:


Glyn, Dr Alan
Nelson, Anthony
Mr. Spencer Le Marchant and


Goodlad, Alastair
Neubert, Michael
Mr. Michael Roberts.


Gow. Ian (Eastbourne)

Division No. 161]
AYES
[6.13 p.m.


Allaun, Frank
Ginsburg, David
Pendry, Tom


Anderson, Donald
Golding, John
Penhaligon, David


Ashley, Jack
Gourlay, Harry
Phipps, Dr Colin


Atkins, Ronald (Preston N)
Graham, Ted
Radice, Giles


Atkinson, Norman
Grant, George (Morpeth)
Richardson, Miss Jo


Barnett, Guy (Greenwich)
Grant, John (Islington C)
Roberts, Albert (Normanton)


Bates, Alf
Grimond, Rt Hon J.
Robinson, Geoffrey


Beith, A. J.
Grocott, Bruce
Roderick, Caerwyn


Bennett, Andrew (Stockport N)
Harper, Joseph
Rodgers, George (Chorley)


Bidwell, Sydney
Harrison, Rt Hon Walter
Rodgers, Rt Hon William (Stockton)


Blenkinsop, Arthur
Hooson, Emlyn
Rooker, J. W.


Booth, Rt Hon Albert
Howells, Geraint (Cardigan)
Rose, Paul B.


Bottomley, Rt Hon Arthur
Huckfield, Les
Ross, Stephen (Isle of Wight)


Boyden, James (Bish Auck)
Hughes, Rt Hon C. (Anglesey)
Ross, Rt Hon W. (Kilmarnock)


Brown, Robert C. (Newcastle W)
Hughes, Roy (Newport)
Rowlands, Ted


Callaghan, Rt Hon J. (Cardiff SE)
Hunter, Adam
Shaw, Arnold (Ilford South)


Campbell, Ian
Jackson, Miss Margaret (Lincoln)
Silkin, Rt Hon S. C. (Dulwich)


Cant, R. B.
John, Brynmor
Silverman, Julius


Carter-Jones, Lewis
Johnson, James (Hull West)
Skinner, Dennis


Clemitson, Ivor
Johnson, Walter (Derby S)
Smith, Cyril (Rochdale)


Cocks, Rt Hon Michael (Bristol S)
Jones, Alec (Rhondda)
Smith, John (N Lanarkshire)


Cohen, Stanley
Jones, Dan (Burnley)
Snape, Peter


Coleman, Donald
Judd, Frank
Spriggs, Leslie


Cowans, Harry
Kelley, Richard
Stallard, A. W.


Cox, Thomas (Tooting)
Lambie, David
Steel, Rt Hon David


Craigen, Jim (Maryhill)
Lamborn, Harry
Stewart, Rt Hon Donald


Crawshaw, Richard
Lamond, James
Stewart, Rt Hon M. (Fulham)


Crowther, Stan (Rotherham)
Lee, John
Stoddart, David


Cryer, Bob
Lestor, Miss Joan (Eton &amp; Slough)
Summerskill, Hon Dr Shirley


Davidson, Arthur
Litterick, Tom
Taylor, Mrs Ann (Bolton W)


Davies, Eryan (Enfield N)
Luard, Evan
Thomas, Dafydd (Merioneth)


Davies, Ifor (Gower)
Lyon, Alexander (York)
Thomas, Jeffrey (Abertillery)


Deakins, Eric
MacFarquhar, Roderick
Thomas, Mike (Newcastle E)


Dean, Joseph (Leeds West)
MacKenzie, Rt Hon Gregor
Thomas, Ron (Bristol NW)


Dempsey, James
Mackintosh, John P.
Thompson, George


Doig, Peter
McNamara, Kevin
Thorne, Stan (Preston South)


Dormand, J. D.
Mallalieu, J. p. W.
Torney, Tom


Douglas-Mann, Bruce
Marshall, Dr Edmund (Goole)
Tuck, Raphael


Duffy, A. E. P.
Mellish, Rt Hon Robert
Varley, Rt Hon Eric G.


Dunnett, Jack
Mikardo, Ian
Wainwright, Edwin (Dearne V)


Ellis, John (Brigg &amp; Scun)
Millan, Rt Hon Bruce
Wainwright, Richard (Colne V)


English, Michael
Miller, Dr M. S. (E Kilbride)
Walker, Harold (Doncaster)


Evans, Gwynfor (Carmarthen)
Molloy, William
Walker, Terry (Kingswood)


Evans, Ioan (Aberdare)
Morris, Rt Hon Charles R.
Watkins, David


Evans, John (Newton)
Mulley, Rt Hon Frederick
White, Frank R. (Bury)


Ewing, Harry (Stirling)
Murray, Rt Hon Ronald King
Whitlock, William


Faulds, Andrew
Newens, Stanley
Wigley, Dafydd


Fernyhough, Rt Hon E.
Ogden, Eric
Willey, Rt Hon Frederick


Flannery, Martin
Orbach, Maurice
Williams, Rt Hon Shirley (Hertford)


Fletcher, Ted (Darlington)
Orme, Rt Hon Stanley
Wilson, Gordon (Dundee E)


Foot, Rt Hon Michael
Ovenden, John
Wise, Mrs Audrey


Ford, Ben
Padley, Walter
Woof, Robert


Forrester, John
Palmer, Arthur
Young, David (Bolton E)


Fraser, John (Lambeth, N'w'd)
Pardoe, John



Freud, Clement
Park, George
TELLERS FOR THE AYES:


Garrett, W. E. (Wallsend)
Parker, John
Mr. Jim Marshall and


George, Bruce
Pavitt, Laurie
Mr. James Tinn.




NOES


Arnold, Tom
Clarke, Kenneth (Rushcliffe)
Gower, Sir Raymond (Barry)


Atkins, Rt Hon H. (Spelthorne)
Costain, A. P.
Grist, Ian


Atkinson, David (Bournemouth, East)
Douglas-Hamilton, Lord James
Hamilton, Michael (Salisbury)


Bell, Ronald
Drayson, Burnaby
Hampson, Dr Keith


Bendall, Vivian (Ilford North)
Dunlop, John
Harrison, Rt Hon Walter


Bennett, Sir Frederic (Torbay)
Dykes, Hugh
Havers, Rt Hon Sir Michael


Benyon, W.
Eden, Rt Hon Sir John
Hayhoe, Barney


Berry, Hon Anthony
Edwards, Nicholas (Pembroke)
Hodgson, Robin


Biffen, John
Elliott, Sir William
Holland Philip


Biggs-Davison, John
Emery, Peter
Hordern, Peter


Boscawen, Hon Robert
Eyre, Reginald
Howe, Rt Hon Sir Geoffrey


Bottomley, Peter
Fairgrieve, Russell
Hunt, David (Wirral)


Brittan, Leon
Farr, John
Hunt, John (Ravensbourne)


Brocklebank-Fowler, C.
Felt, Anthony
Hurd, Douglas


Brooke, Peter
Fletcher, Alex (Edinburgh N)
James, David


Bryan, Sir Paul
Forman, Nigel
Jessel, Toby


Buchanan-Smith, Alick
Fowler, Norman (Sutton C'f'd)
Johnson Smith, G. (E Grinstead)


Budgen, Nick
Fraser, Rt Hon H. (Stafford &amp; St)
Jopling, Michael


Burden, F. A.
Gardiner, George (Reigate)
Kaberry, Sir Donald


Butler, Adam (Bosworth)
Gardner, Edward (S Fylde)
Kimball, Marcus


Chalker, Mrs Lynda
Glyn, Dr Alan
King, Tom (Bridgwater)


Clark, Alan (Plymouth, Sutton)
Goodlad, Alastair
Knox, David


Clark, William (Croydon S)
Gow, Ian (Eastbourne)
Lamont, Norman







Le Merchant, Spencer
Page, John (Harrow West)
Sims, Roger


Lloyd, Ian
Page, Rt Hon R. Graham (Crosby)
Skeet, T. H. H.


Luce, Richard
Page, Richard (Workington)
Smith, Dudley (Warwick)


McCusker, H.
Parkinson, Cecil
Smith, Timothy John (Ashfield)


Macfarlane, Neil
Percival, Ian
Speed, Keith


MacGregor, John
Pink, R. Bonner
Spence, John


McNair-Wilson, M. (Newbury)
Powell, Rt Hon J. Enoch
Stanbrook, Ivor


McNair-Wilson, P. (New Forest)
Prentice, Rt Hon Reg
Stanley, John


Marten, Neil
Price, David (Eastleigh)
Steen, Anthony (Wavertree)


Mather, Carol
Pym, Rt Hon Francis
Stradling Thomas, J.


Maude, Angus
Renton, Tim (Mid-Sussex)
Tebbit, Norman


Mawby, Ray
Rhodes, James R.
Temple Morris, Peter


Maxwell-Hyslop, Robin
Ridley, Hon Nicholas
Thatcher, Rt Hon Margaret


Meyer, Sir Anthony
Roberts, Michael (Cardiff NW)
Trotter, Neville


Miller, Hal (Bromsgrove)
Roberts, Wyn (Conway)
Vaughan, Dr Gerald


Mitchell, David (Basingstoke)
Ross, William (Londonderry)
Viggers, Peter


Molyneaux, James
Rossi, Hugh (Hornsey)
Warren, Kenneth


Monro, Hector
Rost, Peter (SE Derbyshire)
Weatherill, Bernard


Montgomery, Fergus
Royle, Sir Anthony
Wood, Rt Hon Richard


Moore, John (Croydon C)
Sainsbury, Tim



Morrison, Charles (Devizes)
Shaw, Giles (Pudsey)
TELLERS FOR THE NOES:


Nelson, Anthony
Shelton, William (Streatham)
Sir George Young and


Neubert, Michael
Shepherd, Colin
Mr. Peter Morrison.


Nott, John
Shersby, Michael

Question accordingly agreed to.

Clause 46 ordered to stand part of the Bill.

Clauses 47 to 49 ordered to stand part of the Bill

Clause 50

LIMITATION OF CAPITAL EXPENDITURE FINANCED BY BORROWING

A intendments made:

No. 215, in page 19, line 29, leave out 'the British Waterways Board'.

No. 216, in page 19, leave out line 40. [Mr. John Smith.]

Clause 50, as amended, ordered to stand part of the Bill.

Clause 51

WELSH COMPTROLLER AND AUDITOR GENERAL

Question put, That the clausestand part of the Bill:—

The Committee divided: Ayes 167, Noes 135.

Division No. 162]
AYES
[6.25 p.m.


Anderson, Donald
Dunnett, Jack
Hunter, Adam


Ashley, Jack
Ellis, John (Brigg &amp; Scun)
Jackson, Miss Margaret (Lincoln)


Atkins, Ronald (Preston N)
English, Michael
John, Brynmor


Atkinson, Norman
Evans, Gwynlor (Carmarthen)
Johnson. James (Hull West)


Barnett, Guy (Greenwich)
Evans, Ioan (Aberdare)
Johnson, Walter (Derby S)


Beith, A. J.
Evans, John (Newton)
Johnston, Russell (Inverness)


Bennett, Andrew (Stockport N)
Ewing, Harry (Stirling)
Jones, Alec (Rhondda)


Bidwell, Sydney
Faulds, Andrew
Jones, Dan (Burnley)


Blenkinsop, Arthur
Fernyhough, Rt Hon E.
Judd, Frank


Booth, Rt Hon Albert
Flannery. Martin
Kelley, Richard


Bottomley, Rt Hon Arthur
Fletcher, Ted (Darlington)
Lambie, David


Brown, Robert C. (Newcastle W)
Foot, Rt Hon Michael
Lamborn, Harry


Callaghan, Rt Hon J. (Cardiff SE)
Ford, Ben
Lamond. James


Campbell, Ian
Forrester, John
Lee, John


Cant, R. B.
Fraser, John (Lambeth, N'w'd)
Lestor, Miss Joan (Eton &amp; Slough)


Carter-Jones, Lewis
Freeson, Rt Hon Reginald
Litterick, Tom


Clemitson, Ivor
Freud, Clement
Luard, Evan


Cocks, Rt Hon Michael (Bristol S)
Garrett, W. E. (Wallsend)
Lyon, Alexander (York)


Cohen, Stanley
George. Bruce
MacFarquhar, Roderick


Coleman, Donald
Ginsburg, David
MacKenzle, Rt Hon Gregor


Cowans, Harry
Golding, John
McNamara, Kevin


Craigen, Jim (Maryhill)
Gould, Bryan
Mallalieu, J. P. W.


Crawshaw, Richard
Gourlay, Harry
Marshall, Dr Edmund (Goole)


Crowther, Stan (Rotherham)
Graham, Ted
Marshall, Jim (Leicester S)


Cryer, Bob
Grant, George (Morpeth)
Mellish, Rt Hon Robert


Davidson, Arthur
Grant, John (Islington C)
Mikardo, Ian


Davies, Bryan (Enfield N)
Grimond, Rt Hon J.
Millan, Rt Hon Bruce


Davies, Ifor (Gower)
Grocott, Bruce
Miller, Dr M. S. (E Kilbride)


Deakins, Eric
Harper, Joseph
Molloy, William


Dean, Joseph (Leeds West)
Harrison, Rt Hon Walter
Moonman, Eric


Dempsey, James
Hooson, Emlyn
Morris, Rt Hon Charles R.


Doig, Peter
Howells, Geraint (Cardigan)
Mulley, Rt Hon Frederick


Dormand, J. D.
Huckfield, Les
Murray, Rt Hon Ronald King


Douglas-Mann, Bruce
Hughes, Rt Hon C. (Anglesey)
Newens, Stanley


Duffy, A. E. P.
Hughes, Roy (Newport)
Ogden, Eric




Orbach, Maurice
Rowlands, Ted
Tinn, James


Orme, Rt Hon Stanley
Shaw, Arnold (Ilford South)
Torney, Tom


Ovenden, John
Silkin, Rt Hon S. C. (Dulwich)
Tuck, Raphael


Padley, Walter
Silverman, Julius
Varley, Rt Hon Eric G.


Palmer, Arthur
Skinner, Dennis
Wainwright, Edwin (Dearne V)


Pardoe, John
Smith, Cyril (Rochdale)
Wainwright, Richard (Colne V)


Park, George
Smith, John (N Lanarkshire)
Walker, Harold (Doncaster)


Parker, John
Snape, Peter
Walker, Terry (Kingswood)


Pavitt, Laurie
Spriggs, Leslie
Watkins, David


Pendry, Tom
Stallard, A. W.
White, Frank R. (Bury)


Penhaligon, David
Steel, Rt Hon David
Whitlock, William


Radice, Giles
Stewart, Rt Hon Donald
Wigley, Dafydd


Richardson, Miss Jo
Stewart, Rt Hon M. (Fulham)
Willey, Rt Hon Frederick


Roberts, Albert (Normanton)
Stoddart, David
Williams, Rt Hon Shirley (Hertford)


Robinson, Geoffrey
Summerskill, Hon Dr Shirley
Wilson, Gordon (Dundee E)


Roderick, Caerwyn
Taylor, Mrs Ann (Bolton W)
Wise, Mrs Audrey


Rodgers, George (Chorley)
Thomas, Dafydd (Merioneth)
Woof, Robert


Rogers, Rt Hon William (Stockton)
Thomas, Jeffrey (Abertillery)
Young, David (Bolton E)


Rooker, J. W.
Thomas, Mike (Newcastle E)



Rose, Paul B.
Thomas, Ron (Bristol NW)
TELLERS FOR THE AYES:


Ross, Stephen (Isle of Wight)
Thompson, George
Mr. Thomas Cox and


Ross, Rt Hon W. (Kilmarnock)
Thorne, Stan (Preston South)
Mr. Alf Bates




NOES


Arnold, Tom
Grist, Ian
Page, Rt Hon R. Graham (Crosby)


Atkins, Rt Hon H. (Spelthorne)
Hamilton, Michael (Salisbury)
Page, Richard (Workington)


Atkinson, David (Bournemouth, East)
Hampson, Dr Keith
Parkinson, Cecil


Bell, Ronald
Harrison, Col Sir Harwood (Eye)
Percival, Ian


Bendall, Vivian (Ilford North)
Havers. Rt Hon Sir Michael
Pink, R. Bonner


Bennett, Sir Frederic (Torbay)
Hayhoe, Barney
Powell, Rt Hon J. Enoch


Benyon, W.
Hodgson, Robin
Prentice, Rt Hon Reg


Berry, Hon Anthony
Holland, Philip
Price, David (Easlleigh)


Biffen, John
Hordern, Peter
Pym, Rt Hon Francis


Biggs-Davison, John
Howe, Rt Hon Sir Geoffrey
Renton, Tim (Mid-Sussex)


Boscawen, Hon Robert
Hunt, David (Wirral)
Rhodes, James R.


Bottomley, Peter
Hunt, John (Ravensbourne)
Ridley, Hon Nicholas


Brittan, Leon
Hurd, Douglas
Roberts, Michael (Cardiff NW)


Brocklebank-Fowler, C.
James, David
Roberts, Wyn (Conway)


Brooke, Peter
Jessel, Toby
Ross, William (Londonderry)


Brotherton, Michael
Johnson Smith, G. (E Grlnstead)
Rossi, Hugh (Hornsey)


Bryan, Sir Paul
Jopling, Michael
Rost, Peter (SE Derbyshire)


Buchanan-Smith, Alick
Kimball, Marcus
Royle, Sir Anthony


Budgen, Nick
King, Tom (Bridgwater)
Shaw, Giles (Pudsey)


Burden, F. A.
Knox, David
Shelton, William (Streatham)


Butler, Adam (Bosworth)
Lamont, Norman
Shepherd, Colin


Chalker, Mrs Lynda
Le Merchant, Spencer
Shersby, Michael


Clark, Alan (Plymouth, Sutton)
Lloyd, Ian
Sims, Roger


Clark, William (Croydon S)
Luce, Richard
Skeet, T. H. H.


Clarke, Kenneth (Rushcliffe)
McCrindle, Robert
Smith, Dudley (Warwick)


Costain, A. P.
McCusker, H.
Smith, Timothy John (Ashfield)


Drayson, Burnaby
Macfarlane, Neil
Speed, Keith


Dunlop, John
McNair-Wilson, M. (Newbury)
Spence, John


Dykes, Hugh
McNair-Wilson, P. (New Forest)
Stanbrook, Ivor


Eden, Rt Hon Sir John
Marten, Neil
Stanley, John


Edwards, Nicholas (Pembroke)
Mather, Carol
Steen, Anthony (Wavertree)


Elliott, Sir William
Mawby, Ray
Stradling Thomas, J.


Emery, Peter
Maxwell-Hyslop, Robin
Tebbit, Norman


Eyre, Reginald
Meyer, Sir Anthony
Temple Morris, Peter


Fairgrieve, Russell
Miller, Hal (Bromsgrove)
Thatcher, Rt Hon Margaret


Farr, John
Mitchell, David (Basingstoke)
Trotter, Neville


Fell, Anthony
Molyneaux, James
Vaughan, Dr Gerard


Fletcher, Alex (Edinburgh N)
Monro, Hector
Viggers, Peter


Forman, Nigel
Montgomery, Fergus
Warren, Kenneth


Fowler, Norman (Sutton C'f'd)
Moore, John (Croydon C)
Weatherill, Bernard


Fraser, Rt Hon H. (Stafford &amp; St)
Morrison, Charles (Devizes)
Wood, Rt Hon Richard


Gardiner, George (Reigate)
Morrison, Hon Peter (Chester)
Young, Sir G. (Ealing, Acton)


Gardner, Edward (S Fylde)
Nelson, Anthony



Glyn, Dr Alan
Neubert, Michael
TELLERS FOR THE NOES:


Goodlad, Alastair
Nott, John
Lord James Douglas-Hamilton and


Gow, Ian (Eastbourne)
Page, John (Harrow West)
Mr. John MacGregor.


Gower, Sir Raymond (Barry)

Question accordingly agreed to.

Clause 51 ordered to stand part of the Bill.

Clauses 52 to 58 ordered to stand part of the Bill.

Schedule 6

ENACTMENTS AUTHORISING THE LENDING OF MONEY

Amendment made:

No. 214, in page 63, leave out line 44.—[Mr. John Smith.]

Schedule 6, as amended, agreed to.

Clause 59 ordered to stand part of the Bill.

Clause 60

RATE SUPPORT AND OTHER GRANTS

The Under-Secretary of State for Wales (Mr. Alec Jones): I beg to move Amendment No. 89, in page 23, line 34, leave out from 'year' to 'fall' in line 35 and insert
'which after the coming into force of this section.'.
I have a sneaking suspicion that although this amendment is somewhat technical, discussion of it might roam a little more widely.
The clause as it stands provides that the transfer to the Assembly of the function of paying the rate support grant is to operate only in relation to a complete new financial year. If the Assembly came into being at the beginning of the financial year, there would be no doubts about the powers that it might have, but if the Assembly came into being in the middle or part way through a financial year, doubts have been expressed whether it would have power to pay under RSG orders.
The amendment will remove that doubt so that the Assembly will be able to make payments under such orders without any shadow of doubt, at whatever time of the year it comes into being. The amendment parallels a Government amendment which was introduced to the Scotland Bill on Report and subsequently accepted.

Mr. Nicholas Edwards: Let me at once reassure the Minister that I do not intend to widen the debate. This seems to be a particular and narrow point. However, I have one question to ask the Minister.
I understand that if the Assembly comes into being half way through the year, it will be able to pay out of rate support grant. I wish to discover on what basis it will receive moneys to do so. The negotiating timetable in respect of RSG is prolonged and involved, it goes on for more than a year, in practice, and presumably the Assembly will not have been involved in the process and it will be complete or half way through. Is the

process to be that moneys negotiated by central Government are handed over at that point, lock, stock and barrel, to the Assembly, which then carries out the function of passing them on?

Mr. Alec Jones: That is true. If the Assembly takes over half way through, the money allocated in RSG orders prior to the takeover will be immediately handed over.

Amendment agreed to.

Question proposed, That the clause, as amended, stand part of the Bill.

6.45 p.m.

Mr. Nicholas Edwards: We now come to a clause that is of critical importance to local authorities, which are so greatly threatened by the provision of the Bill. Owing to the operation of the guillotine, we were unable to debate the undermining of their position and the confusion that would be caused by the transfer of functions under Schedule 2; nor were we able to consider the interference with their operations that is bound to arise from the committee structure proposed in the Bill. We are, however, now able to consider in more detail part of the Bill that fundamentally undermines and weakens their position. As part of a scheme that is supposed to bring government closer to the people, we are seeing an attack on the position of the democratic bodies which are closest to the people.
We tabled an amendment which has not been called but which had the object of putting back the Welsh local authorities in a direct relationship with Government in their negotiation of the rate support grant. That amendment would have enabled them to negotiate their own rate support grant, instead of having it negotiated for them.
We have been told that the Bill will bring no reduction in local authority powers, but it is hard to imagine a more crucial reduction of powers than for them to be removed from the negotiation of their own finances. Yet that is what is effectively to happen if the clause is allowed to stand and if the complex and obscure arrangements set out in it are to remain unaltered.
I refer to the arrangements as "complex and obscure" and I freely confess that, after a good deal of study, thought


and consultation, I do not understand how they are to work. Most of the people in this Committee would confess to a certain bewilderment over rate support grant generally. Few would claim to be authorities or experts in this respect. But on the particular confusion that arises, I am comforted by the knowledge that local government officials who have spent much of their working lives dealing with these matters are as baffled as I am. People to whom the rate support grant is as simple as ABC find this Bill and this clause confusing.
The fundamental difficulty is that we have two parallel processes, and it is hard to see exactly how the system interlocks. The first process is that every four years or so Government and Assembly are to negotiate a block grant. I keep on saying "every four years" because this is what the White Paper said would happen. It is not in the Bill, and no Minister has yet confirmed or denied it, so I assume that the period will be every four years.
In that negotiation the local authorities will not be involved. If the White Paper is to be taken as a guide Assembly and Government are to thrash out the relationship between devolved public expenditure in Scotland and Wales with comparable expenditure elsewhere in the country on the basis of relative need, and they will have it expressed as a percentage of comparable expenditure in the country as a whole. Payments are then to be made to the Assembly by order under Clause 46. Yet about half of the block grant—£500 million—will consist of RSG. the level of which for the United Kingdom as a whole will be negotiated separately on an annual basis by the local authority associations and central Government.
How will these two independent negotiations dovetail? Presumably, when negotiations begin on the block grant the Assembly will be informed of the total of the RSG settlement in that particular year for the United Kingdom as a whole and will then, without the direct involvement of the Welsh local authorities, seek to secure a fair share of it for Wales. But what will happen if, during subsequent RSG negotiations in the years after the block grant has operated in its four-year course, the level of support is raised or varied by substantial amounts?

Is there then to be an immediate adjustment of the block grant, or is Wales to have to wait until the fourth year for the block grant to be altered?
There appear to be two possibilities. There has either to be some kind of automatic adjustment of the block grant, in which case we have the remarkable situation that the grant, to the extent of half its total, is negotiated by the local authorities during the RSG negotiations and not by the Assembly at all; or there is no such automatic adjustment, in which case the money received by Wales for RSG may bear no relationship at all to the local authorities' needs or to the sums received by comparable authorities in England.
The present role of local authorities in the negotiation of their own funds will be fundamentally altered. I understand that the Welsh share of the rate support grant will be decided without any direct local government involvement. No role is envisaged for local authorities in Section 46 negotiations which decide the total share that comes to Wales—whether it is to be £476 million, as it was in 1975–76, £500 million, or any other sum. Considering that the interest of local authorities amounts to about half of the block grant total, that seems to be an extraordinary position.
Presumably, Welsh local authorities, through their membership of local authority associations, will play a part, as at present, in the year-long process of discussion which leads up to the rate support grant settlement, though whether they will be able to have the separate discussions that go on with Secretaries of State during that process, and with the Secretary of State for Wales in particular, is not clear.
What is to be the position of the Assembly during this process? In due course, it will have to allocate the Welsh share among the Welsh counties and it is hard to see how it can do that properly if it has played no part in, and has been excluded from, the United Kingdom rate support grant negotiating process. On the other hand, if it is to be included, what is to be its relationship with the local authority associations? It seems that the presence of the Assembly alongside the local authorities in the negotiations would be an immense complication.
We come to the critical point in the whole affair. When the rate support grant negotiations have been completed and the size of the block grant has been fixed, the Assembly will have to allocate the funds between Welsh local authorities. It is an indication of the obscurity of the Bill and the way that the Government have explained it, not just publicly but in their private discussions with local authorities, that the authorities, particularly the Association of County Councils, are uncertain whether they have the right to be consulted by the Assembly about this stage of the process.
I have two papers from the Association of County Councils, one dated 23rd March and the other 29th March, and they draw precisely opposite conclusions on this point. In the covering letter, the secretary of the association says:
I should, however, point out that the notes are prepared
—well, at least one set of notes—
on the assumption that the Assembly is not required to consult local authorities. This position is, however, far from clear and the effect of clause 60 could be to import the procedures laid down in the Local Government Act, 1974, except that with regard to devolved functions, the Assembly takes the place of the Secretary of State: if this is correct then the Assembly will be obliged to consult the local authorities through their Associations.
I do not think that the uncertainty is the fault of the associations. However, as I read the clause the provisions of the Local Government Act 1974 stand except that in Wales the Assembly takes the place of the Secretary of State. That being so, presumably the Welsh local authorities must be consulted, but we want the Minister to confirm that. I know that the Minister is always helpful in replying to our debates—unlike some of his colleagues—so I am confident that we shall get an answer on this point, which is of so much concern to local authorities.
There is one further complication. In addition to the duplication that arises through the existence of the block grant and the rate support grant, another parallel consultation must take place. It is one from which the Assembly is apparently excluded. It takes place directly between the Secretary of State and the local authorities and concerns the reserved functions dealt with in Schedule

5. The most important of those functions is the police. That provides by tar the largest sum of money.
This matter was debated during the proceedings of the Scotland Bill and, if I understand the explanations given there, the negotiations on the reserved functions are wholly separate. It is a matter solely for the Secretary of State, but once the sum has been negotiated, it is then put into the total that is handed over to the Assembly and the Assembly is responsible for passing it on to the appropriate bodies. That seems to be an added complication. It is not surprising that the Association of County Councils should comment, in its letter:
However, even if an express requirement to consult were incorporated in the Bill, it would not affect our fundamental concern, namely, that the whole procedure will be both cumbersome and protracted and there will be two sets of consultations taking place simultaneously, namely, the one with regard to devolved functions with the Assembly, and the other with regard to the reserved functions with the Secretary of State. Our concern is that the whole machinery is much too involved and that local government will be so far removed from the ultimate source of finance that its voice will not be effectively heard.
I believe that the association is being unduly charitable, because there will be three parallel sets of consultations, adding confusion to existing confusion and delaying what is already a lengthy process.
It is not surprising that in one of the papers the Association of County Councils should refer to the dangerous weakening of the present direct involvement of local government in Wales in decision making on the amount and distribution of Government funds. It says:
It is true that the Wales Bill provides for these decisions to be made by a democratically elected body, namely the Welsh Assembly, but it is equally true to say that the proposals take away from local authorities, who are also democratically elected, the rights of consultation which they now enjoy and who it might be argued, are closer to the electorate than are the Welsh Assembly members.
Yet another doubt is about the time-scale of the negotiations—if any—on the Rate Support Grant in Wales.
Consultations and negotiations on the amount and distribution of grant to local authorities are at present protracted and complicated and it is to be hoped that the creation of the Welsh Assembly will not result in any further delay in the notification to local authorities of their entitlement.
The Welsh local authorities have every reason to be anxious. The Government have made clear that the Assembly is free


to distribute the rate support grant to the Welsh councils as it is received—or not distribute it, as it pleases. It can if it wishes, leave the Welsh counties significantly worse off than their English counterparts. It may do this because it attaches higher priority to some other public expenditure programmes or because it wishes deliberately to impose an indirect tax on the Welsh people.
As I pointed out in a debate yesterday, the Assembly can effectively tax without incurring the odium for doing so. It simply has to pay out less rate support grant to local authorities, forcing them to increase rates. It has, by that simple method, increased the resources available for non local government expenditure. There is no doubt that that is the position.
7.0 p.m.
The matter is clearly set out in paragraph 228 of the White Paper and was confirmed by the Secretary of State for Scotland during the Scotland Bill, in terms which were contemptuous of the Opposition spokesmen, who had expressed some doubt about the proceedings and was charitable enough to think that he might possibly have got it wrong. He was told that of course he had not got it wrong and that it should have been obvious to anyone that that was the position.

Mr. Dalyell: Since then the hon. Member will not be surprised to hear that some of the most senior and experienced local government heavyweights of Scotland have expressed extreme dissatisfaction since they have tumbled to what is on.

Mr. Edwards: I am sure that that is so. I am not sure that the Welsh local authorities are fully aware of the position. They are aware of the confusion and full of uncertainties about how it is going, but it has not come home to them that this power of indirect taxation is to lie with the Assembly. District authorities at present will fully understand the dangers, because they have the job of passing on to their electors the precepts from the counties. We know the feelings that this arouses. We know the blame that is attached to counties for levels of taxation and rate burdens which they do not themselves control.
This will be precisely the position. The Assembly, perhaps for very good reasons,

will decide that there is an urgent need in a particular year to spend more money and that it can extract money from central Government in Westminster for social or industrial purposes. It might wish to spend more on hospitals in that year. The burden for doing so will then fall not on the taxpayers as a whole and not on the Assembly. It will not accept the responsibility in financial terms. It will fall on the unfortunate local authorities, who will have no say in the matter.
It is clear that the proposals of the Government would make Welsh local authorities wholly subservient to the Assembly. The clause that we are debating also, on its own, demolishes the "no extra tier" argument that we have heard so often from the Secretary of State. This point was mentioned yesterday by the hon. Member for Bedwellty (Mr. Kinnock), who raised the "no extra tier" argument. This is the point at which it it finally demolished, when that absurdity is put to rest.
What could be a more solid tier than one that provides and distributes the money? The money goes from central Government to the Assembly and then, in whole or in part, at its discretion and at its whims, it is handed over to local government. We cannot be told that this is not an extra process but a mere duplication of an existing Government function. It is a separate and additional function. It is clear that we have got an additional tier of government. It is a wholly additional stage in the process at its most fundamental point, the financial one.
It shows how fatuous are the repeated mouthings, in particular, of the Secretary of State for Wales on this point. He seems to have the impression that if he repeats an untruth sufficiently often it will be transformed into reality, but reality is now clearly before us. Through this clause we are seeing a weakening of local government. We are seeing a weakening of those parts of the democratic process that are closest to the people.
Far from bringing government closer to the people, we are seeing it being taken further away. We can see no reason why this should be so. We can see no reason for the introduction of this complex and cumbersome process. We can see no reason for the introduction


of an extra tier between the local authorities and the central Government—an extra tier which, incidentally, because of its committee structure, inevitably will want to interfere and play an active part in the activities of the local authorities.
We can see no reason why the Assembly should dictate to local authorities the scale and distribution of their finances. We think that local authorities should be able to negotiate with the central Government direct. That is what the local authorities themselves think, and that is what they want. We think that the clause is an abomination. I therefore ask the Committee to reject it.

Mr. Ioan Evans: In the clause we are dealing with the rate support grant as it affects local government. It is interesting to recall the statement that I made during the Scotland and Wales Bill that I believed that local government would be affected. There was then a strong argument that local government would not be affected. The White Paper said that local government would not be affected.
We have already passed Clause 13—unlucky for some. That is the clause which states that the Assembly is to deal with the review of local government structure. Everyone here knows that if the Assembly is to be established we cannot continue a system of local government in Wales where we will still have eight counties and 37 district authorities. Therefore, it is now self-evident, as the argument develops, that local government will be seriously affected if the Welsh Assembly comes into being.
The hon. Member for Pembroke (Mr. Edwards) referred to correspondence that he had received from the counties of England and Wales. I have a letter from the honorary secretary of the Welsh Counties Committee. Writing on behalf of the eight counties in Wales, he says:
I have already expressed to you the concern felt by the Welsh Counties Committee regarding the provisions of the Wales Bill in connection with the Rate Support Grant, but perhaps the following may be of some assistance to you when the matter is under consideration in the House.
It is not clear whether the Assembly, if established, will be required to consult local authorities. It could be that the effect of Clause 60 would be to import the procedure

laid down in the Local Government Act 1974 except that with regard to devolved countries, the Assembly takes the place of the Secretary of State; if this is correct, then the Assembly will be obliged to consult the local authorities through their Associations.
However, even if an expressed requirement to consult were incorporated in the Bill it would not affect our fundamental concern, namely that the procedure will be both cumbersome and protracted and there will be two sets of consultations taking place simultaneously, namely, the one with regard to devolved functions with the Assembly, and the other with regard to the reserved functions with the Secretary of State. Our concern is that the whole machinery is much too involved and that local government will be so far removed from the ultimate source of finance that its voice will not be effectively heard.
We are presumably trying to make government more effective, but the organisation representing the eight counties in Wales is concerned at the apparent centralisation of powers away from the counties and into Cardiff. This is a fundamental weakness of the Bill.
I said before, but I think that it needs to be repeated, that the way in which we have gone about devolving powers—I believe in devolving powers—is by maintaining the existing local government structure in Wales and between the House of Commons and the existing local government structure, which some Labour Members have criticised because it is too bureaucratic. We have maintained it without change and we have created this new Assembly which will be dealing with the rate support grant.
The hon. Member for Pembroke has referred to some of the items mentioned in the document that he received from the counties of England and Wales. From the Welsh counties there are three or four points that I would like to make which have not been covered. The document says:
There is considerable concern in local government in Wales over the danger inherent in the Wales Bill that local government will have far less influence than it now has in decisions about (a) the total amount of Government grant to local authorities in Wales and (b) the manner in which the grant is allocated to individual councils.
Whereas the Bill appears to give local government the same rights as at present in discussing the total amount of Government grant to England and Wales, local authorities appear not to have any right to participate in the division of that amount between England and Wales.


That is a fundamental change. It continues:
Similarly, in regard to the distribution of grants to individual councils, the Bill appears to give the Assembly total discretion with no obligation whatever to consult local authorities directly—merely to take advice from the Secretary of State who, in turn, may or may not consult with local authority associations. Another disturbing feature is that the Welsh Assembly, having been allocated money by Parliament appears to have the freedom to allocate it between local government and other services such as health or even to retain it for its own purposes without the obligation to consult local authorities beforehand. This is a significant and, in the view of the local authorities, dangerous weakening of the present direct involvement by local government in Wales in decision making on the amount and distribution of Government funds.
That is fundamental to the Bill. We are talking here about devolving power to the people, but 37 district authorities and eight county councils are now in danger of suffering from the centralisation of local government power within Wales. That is a fundamental weakness of the Bill.

Mr. Emlyn Hooson: Can the hon. Gentleman point to any part of the Bill that removes the legal requirement that representatives of local government should be consulted about these matters? That is the law under the Local Government Act and nothing in this Bill changes that.

Mr. Evans: I have read out the views of the eight counties in Wales. The honorary secretary representing the hon. and learned Gentleman's county—Powys—and my county—Mid-Glamorgan—has sent out this statement. At present, all the local authorities are involved, through the English and Welsh associations, in consultations with the Government. To change the method of financial allocation in the way proposed means that in future there will be a block grant to the Assembly and that the local authorities will not be able to involve themselves in the discussions.

Sir Raymond Gower: There appears to be some doubt whether there is any obligation to consult. The Under-Secretary could put us out of our misery immediately by telling us. We need debate this subject no further if the Minister says that there is an obligation to consult.

Mr. Alec Jones: I am astonished at the ignorance which persists on this matter. Let me repeat yet again that the Welsh Assembly will inherit the responsibilities of the Secretary of State to consult the local authorities in Wales in deciding the rate support grant.

Mr. Evans: So the Assembly will take over the responsibilities now being exercised in this House by the Secretary of State.

Mr. Jones: They will have to consult.

Mr. Evans: Yes, but the point is that the Assembly will be making the decisions. Now there is a direct contact between the local authorities and this House through the Government. That connection will be broken, because in future the authorities will have to deal entirely with the Assembly.

Mr. D. E. Thomas: Does the hon. Member accept that in no sense is there now a separate Welsh support grant negotiation because there is a total allocation on an England and Wales basis. There is negotiation between the Treasury and the Welsh Office, but as far as I am aware the Welsh counties do not negotiate separately for their share. That is negotiated at Welsh Office level.

7.15 p.m.

Mr. Evans: The Welsh local authorities, with their counterparts in England, are involved through their associations in making representations to the Government. It is done on an England and Wales basis. Under the Bill that will cease to happen. In future, if rate support grant powers are given to the Assembly, the only discussion will be between the local authorities and the Assembly. The local authorities in Wales will not join the English local authorities to determine the allocation.

Mr. Kinnock: The impression that I gained from what my hon. Friend the Under-Secretary said is that there will be one other series of conversations and that will be either between the Welsh Office and the Treasury, as now, or between the Welsh Assembly and the Treasury, in which case either the Welsh Office will become redundant or the Assembly irrelevant. The most important discussion will clearly be with the people at the head of the well who are holding the purse strings


very firmly—too firmly in some respects—and that is the Treasury.

Mr. Evans: We have had this semantic argument about whether there will be another tier of government. There will be another tier of government between the district and county councils and this House. That tier will be the element in government that will determine the allocation of the rate support grant.
The next factor is that we do not know the amount that will be allocated. It might be a little less than hitherto because the administration of the Assembly could well take a part of the grant. Let us presume, however, that it is exactly the same and that there will be an additional allowance for the administration of the Assembly. We must presume that nothing in the Bill will give additional public resources to Wales. The rate support grant in future will not be any greater. Whereas at present the counties and districts have been discussing how that allocation should be made with their English counterparts, the determination of the priorities of public expenditure will in future rest with the Assembly. That fear has been expressed in the document that we have had from the counties. I can see all sorts of problems arising. Instead of our getting an extra allocation, for example, for hospitals in Wales, we may find that far less satisfactory arrangements will apply.

Mr. Tom Ellis: If I understood my hon. Friend's argument in terms of the amount of money involved—not so much the actual distribution of the block grant—he said that local government would now be further away from the source of the money and it would therefore be likely to get less. He presumably meant that its influence would be less.
I wonder how my hon. Friend reconciles that argument with the arguments that we heard earlier this afternoon from the right hon. Member for Cambridge-shire (Mr. Pym), who set before us the dangers of establishing a quasi-Parliament that would be so powerful as to change this Parliament. It is difficult to argue, on the one hand, that it will be tremendously powerful and, on the other, that it will be less powerful because it will be negotiating with the Treasury and the local authorities.

Mr. Evans: My hon. Friend is a very good debater. He puts forward a point that he claims I made and he then presumes to answer it. I never said anything of the kind. In these days of communications, when one can travel around the world so quickly, the question whether the money was deposited in the bank in London or Cardiff would be of no consequence. The point is that this is a
significant and, in the view of the local authorities, dangerous weakening of the present involvement by local government in Wales in decision making on the amount and distribution of Government funds.
The authorities say that the present arrangements involve them in the general discussions, but that the Bill means that the Assembly will assume that role. The authorities will be reduced to having discussions only with the Assembly itself. They will not be involved in discussions with us. I believe that that is a weakening of democracy and not a strengthening.

Mr. Hooson: The hon. Gentleman must not continue to make these misstatements. We in the House of Commons do not have any discussions with local authorities. Only the Welsh Office and the Department of the Environment have discussions with loca lauthorities.

Mr. Evans: Is the hon. and learned Gentleman saying that the Welsh Office is an autonomous body? The Welsh Office is answerable to us. We have Welsh Questions and a Welsh Grand Committee. The Welsh Office has its premises down the road. There are Welsh Office civil servants in this place. Welsh Office Ministers are on the Government Front Bench. They are answerable to us. The allocation of the rate support grant is not decided purely by the Welsh Office. In that respect local authorities in England and Wales have been more together than local authorities in Scotland, which have been dealt with separately. Local authorities in England and Wales have cone together in joint associations. They negotiate with Government, and the various Departments, including the Treasury, determine the allocation of the rate support grant. What applies to Wales it similar to that which applies to England.
We are now creating a situation that is more in line with the autonomy that the Scottish Office has had at Scottish local


government level. We shall have a situation in which the Welsh rate support grant is a separate issue. The Scottish rate support grant has been a matter in which Ministers are answerable to the House of Commons, but presumably under the Scotland Bill it will go to Edinburgh. Under the Bill before the Committee, the Welsh rate support grant will go to Wales.
Fears have been expressed by those in local government in Wales about that development. There are those who say "vested interest". Who is there who talks about devolution without a vested interest? All of us have vested interests After all, Members in this place will be affected. It is a cheap gibe to tell the counties that they are concerned about these matters only because they are afraid that the counties will be removed at a later stage. Their participation in the argument is valid.
We have reorganised local government. As the Committee knows, it is my opinion that we should have reorganised it differently. However, the people of Wales have gone through the traumatic experience of local government reorganisation. Although the structure could be improved, we must give the matter careful consideration and ensure that the next time we make a change it is one that will make local government really effective.
The effect of the Bill is to create uncertainty. For example, we do not know who will constitute the Assembly, but will the Assembly have powers to reorganise local government or to make recommendations to reorganise? The uncertainty will begin if the decision is taken by the referendum to create a Welsh Assembly.
What is to become of those who are employed in the county councils? If we had created a top-tier local government structure, the existing Civil Service need not have been affected. If that had been done, we need not have employed a new group of civil servants to cater for the Welsh Assembly. The problem that we shall run into in future when talking about the allocation of the rate support grant is the creation of a new Civil Service, or an extension of the British Civil Service, to cater for the Assembly.
It will be given the function of removing a tier of local government. If it decides to remove the county councils, it

may decide that the district councils are too small and the county councils are too large and that both should be scrapped. It may decide that we should have something in between. What is to become of those who are now involved in the administration of county councils and district councils? These are the uncertainties of which we should be aware as matters proceed.

Mr. Dalyell: My hon. Friend has referred to the extension of the home Civil Service. In fact, it is responsible to a very different body. That brings us back to a question that has not been answered. For example, are the same civil servants to serve a Labour Chief Executive in Cardiff and a Conservative Secretary of State?

Mr. Evans: That is another aspect of the problem with which we are faced. I believe that I am right in saying that the Government's intention was not to create a separate Civil Service. It was the intention that by means of promotion, for example, civil servants would be able to move from serving the Assembly into other sections? However, that is one of the problems that we have to consider.
I revert to the rate support grant and the fears that have been expressed. It is important in discussing this issue not to think that what the people of Wales are getting is something that will bring them tremendous benefit. A great deal of harm will be done to the Assembly, if it is created, if people's expectations are raised. If that happens, I am sure that their expectations will not be fulfilled. There will not be an increasing number of hospitals, schools, roads or houses merely as a result of altering the machinery of government.
In this debate we are involved with the machinery of government in the allocation of the rate support grant. We are not saying that the grant will be increased. Indeed, we do not know what will happen. There is the danger that it will be diminished if the present allocation of public expenditure to Wales is to be absorbed in the Assembly. That is what we should have in mind.
I hope that my hon. Friend the Under-Secretary will reply to the real fears that have been expressed by the county councils and the district councils, including my own local authority, the Cynon Valley


Borough Council. The borough council, the Mid Glamorgan County Council and all the counties in Wales have expressed their fears about the effect of the Bill as regards financial allocation. I hope that my hon. Friend will be able to allay at least some of those fears.

Mr. Peter Temple-Morris: I make a brief intervention to follow the hon. Member for Aberdare (Mr. Evans). I agree with very much of what he said. My intervention is a cry from the border. It is a cry from the English constituencies that neighbour Wales.
Some years ago I left Wales, politically speaking, and by a somewhat circuitous route I found myself representing an English constituency in a border area. I now represent, as does my hon. Friend the Member for Hereford (Mr. Shepherd) an English border constituency. I look at the land that I left and I see that it has many advantages already, irrespective of who wins the argument that is now concerning the Committee. It has many advantages, whether control is to rest with the Secretary of State or is to go to the Assembly.
The plain fact is that, collectively speaking, hon. Members from both sides of the Chamber who represent Welsh constituencies are doing extremely well. A short while ago I heard the voice of the hon. and learned Member for Montgomery (Mr. Hooson). The hon. and learned Gentleman was speaking, amiably as usual, from a sedentary position. I hope that he will agree that he represents a good example of what I am trying to say about the present situation.
I made my maiden speech in the House in 1974 during a rate support grant debate. At the time it was an issue that welled up, comparatively speaking, to the most enormous political proportions. The argument comes down to the difference—I shall come to Montgomery as a specific example—in the domestic relief element of the rate support grant. I do not have the latest figures, but the purport of what I am saying is that the situation could become worse under the provisions of this measure. There was an enormous difference between Wales and the border areas a regards benefits or detrimental effects.
7.30 p.m.
In other words, one of the results was a disparity in domestic relief in those days of about 33p as compared with 16p, and I think that there is still such a disparity. It is a considerable difference when one has exactly the same problems on either side of the Welsh border.
One of the reasons for this was the Welsh National Water Development Authority. It supplies very nice water—but also very expensive water that has to be consumed by us on our side of the border as much as by those on the Welsh side. They, incidentally, will be controlling politically the affairs of that authority to no mean extent under these measures, and increasingly so. We on our side prefer to rest, as far as we can, with Whitehall, be it the Welsh Office or the Minister of Agriculture.

Mr. Alec Jones: Will the hon. Member give way?

Mr. Temple-Morris: No, I just want to finish, because I sense that the hon. and learned Member for Montgomery is wondering what I shall say about his constituency. I want to finish the point to which I have been building a long time because it represents a good example of what I am saying.
As one gazed across the border and up towards the halcyon areas of Montgomeryshire, one saw there the benefits of this domestic relief, to the extent that I have described, and because of hydrological boundaries, and so on, the fact that one of the reasons for that relief was the cost of Welsh water was not shared by the citizens of Montgomeryshire, who, very sensibly, got themselves into the Severn-Trent Water Authority and had the best of both parts of the question.

Mr. Hooson: Of course, as the hon. Member appreciates, Montgomeryshire produces most of the water for the Severn-Trent Water Authority.

Mr. Temple-Morris: I quite appreciate that, too, but at the same time, the ordinary people of Montgomeryshire, his constituents, as with my constituents, do much the same work mainly in an agricultural area, and have much the same wages. There are low wage areas on both sides of the border. It so happens


that the hon. Member's constituents are a lot luckier than mine.
The sort of thing that we are discussing here can continue. Here I want to wheel into the main theme of the argument the fact that the sort of things that we have here give the opportunity for greater disparities from the one to the other. I speak very much in support of what my hon. Friend the Member for Pembroke (Mr. Edwards) has said about this, together with other hon. Members. Essentially, we are dealing here with something that is best centrally negotiated and where exactly the same rules of the game apply on whatever side of the border one happens to be. We are dealing with English counties, which are at present negotiated and with Welsh counties, which are at present negotiated very much on the same principles and with the same expertise.
An additional point is that by taking this matter away from the Welsh Office and putting it with the Assembly, we are dealing, as has been mentioned, with an extremely complex matter. It is something that even those possibly most intimately associated with it do not fully understand. I and, I am sure, other hon. Members, have been on various deputations concerning this matter to the Department of the Environment. When one goes there one wonders who on earth understands what he is talking about. I do not want to be disparaging in any way, but usually some rather junior and comparatively insignificant civil servant is wheeled into the room, and perhaps he is the only man who understands the particular matter of the whole discussion. He rescues his Minister—we shall keep this anonymous—and the members of the deputation and everyone else. Then he departs in the sure knowledge that he can do the same thing again next year because no one has in the least understood what he has done this year.
However, bringing that through to the Welsh Assembly, this complex thing will be carried out by the Assembly and its civil service. I shall not go into the due loyalties of the civil servants, and that sort of thing, but great expertise will be needed, and the Assembly will very rapidly have to acquire it, almost in midstream, in the middle of one year.
One wonders whether the Assembly will be able to do that. In addition to that,

even if it can do that—even if the Assembly took over the apocryphal young gentleman to whom I have just been referring even if it borrows him for a little while—one wonders whether it will be able to do that in quite the same manner as that with which we and the Government here seem somehow to get away with the matter.
Parliamentary time is a rarified thing. Indeed, concerning the rate support grant debates, it is perhaps a little rarer than it is with some other things. Hon. Members will recollect that it is often very difficult to get around one's hospitals at Christmas time and to attend a debate which almost traditionally occurs, if not on Christmas Eve, about two days before then.
That is the situation. It is a fait accompli. It is done by negotiation and close co-operation between local authorities and Government Departments concerned. Then it comes to us here. We have a debate somewhat late in the day. After that debate, what has been decided previously carries on its governmental march to the inevitability of law.
If we translate that, as it happens here, to what could happen in the Assembly, which, while it may have many things about which to talk, will not perhaps have the same pressures that we have and will be able to make its own rules, what happens if we then get a tearing political pressure? If the local authorities are, as they fear, to subside in this matter, it will increasingly become—furthering the argument that was made by the hon. Member for Aberdare—the responsibility of the individual Assemblymen, and there will be that much greater inclination for people to fight cats and dogs with each other for their share of whatever gold, or whatever it is, is available.

Mr. Geraint Howells: Solid gold.

Mr. Temple-Morris: The hon. Member may have that in his constituency. I do not know. I certainly have not got it in mine. All that I know is that the low-flying aircraft that pass over my constituency seem to make a habit of crashing in his, and that is the nearest connection that I have with his constituency, apart from happy social connections.
However, returning to the serious point, as I see it, we could have extremely


disorderly circumstances for the administration of the rate support grant. It is a threat. It is a logical carrying on of the arguments that have been expressed already.
One additional point concerns something that arises out of the clause and applies equally on both sides of the border. In any debate concerned with rate support grant, this should be mentioned, because as we are striking out into new pastures, we might at least have the imagination—with due deference to the Under-Secretary—perhaps to try something a little different. If we are all to be so separate and the rest, why cannot we change the concept of the rate support grant? As it stands, the clause talks about the grants for any financial year.
Of course, we are back to the same thing, which is very difficult—this is not strictly a devolution point, although it arises out of the clause—that many people, not least county treasurers, borough treasurers and so on, have been complaining about for years. They never know the sum of money that they will be getting until just before they get it. Here, with the Assembly, they may well have a political fight on their hands as to the distribution of that money. There is a serious danger that the county authorities will be cut through to the end of the line until they know where they stand.
It is certainly a difficult system. I am no lover of it. One of its worst features, to take my own county of Hereford-Worcester as an example, is that in the present rating year. 1977–78, rate support grant cut about £8 million, or an 8p rate into which that sum translates, off the county of Hereford-Worcester. That was done with about three months' notice. One can imagine the tortuous gyrations of any county treasurer, ours in particular, when he is having to make up the necessary cuts, and the councillors who, until the announcement is made, cannot get the necessary political battle lines drawn in order to decide where those cuts will fall most.
All these things can be translated into the Assembly and this discussion on the clause, All of them add up to one thing

—that is most certainly greater chaos than there was previously.
This is a classic example of the extra tier being introduced. There are eight counties and 37 district authorities, all of which are fearful. Above them is Whitehall and between them there is this awkward Assembly struggling for some kind of influence along the way. If and when the Assembly overcomes these difficulties, one will still have the sinister connotation that was so well brought out by my hon. Friend the Member for Pembroke that there is a hidden power of direct taxation and a built-in possible political imbalance between the power of the Assembly and the power of the local authorities. This is a real fear. I appreciate it. It is not for me to speak for Welsh authorities, but I do appreciate their concern. If the Bill ever sees the statute book, I am sure that this is but another example of the difficulties and confusions that will be created by it.

Mr. D. E. Thomas: We have had two interesting and contradictory speeches from successive hon. Members. The hon. Member for Leominster (Mr. Temple-Morris) expressed deep concern that the Welsh Assembly arrangements by which it will take over the functions of the Secretary of State for rate support grant will ensure an increase in the resources available to Welsh local authorities compared with his own border area. Earlier the hon. Member for Aberdare (Mr. Evans), raising bogeys as always, expressed deep concern that somehow the changes proposed in Clause 60 would result in lower rate support grant resources being made available to Welsh local authorities.
The hon. Member for Leominster read his brief from the Welsh counties that take the same view as he about this clause. However, the hon. Member did not explain sufficiently clearly the way in which the present system operates and the differences that will result from the clause.
I welcome the clause, regardless of the Bill in which it is contained, because it is a step forward in the way in which we allocate resources to Wales.

Mr. Ioan Evans: I know that the hon. Member believes in a separate, independent Wales datganoli. We are talking not about that but about devolution. How does the hon. Member see the future of local government? Does he believe that


the counties should go? Does he believe that the districts should go? Should they both go, or should they remain as they are?

Mr. Thomas: The hon. Member made a Clause 13 speech on Clause 60. I shall restrict myself to dealing with the way in which the rate support grant system will be organised. The hon. Member did not explain the difference between the present system and the proposed system. The proposed system is a step forward, leaving aside the whole concept of the Assembly. For the first time we shall have a rate support grant negotiation for Wales. We have not had that in the past.
7.45 p.m.
The present system is that negotiations are conducted between the Association of County Councils and the Department of the Environment with Civil Service representation from the Welsh Office. There is also a separate meeting—I stand corrected if my chronology of events is wrong—between the Welsh Counties Committee and the Secretary of State for Wales, where the global allocation for Wales is discussed. The actual negotiation is handled between the Association of County Councils in London with the Department of the Environment as the major partner and the Welsh Office as the minor partner in the discussion.
The result of this is that we have a county-by-county allocation of the rate suport grant. That is the argument that the hon. Member for Leominster made. It is an allocation not to Wales but direct to the Welsh counties. Consequently, there are continuing complaints from the counties, as we experienced in the last rate support grant settlement.
My own county of Clwyd has written to me to say that this is terrible and that resources are being transferred from Clwyd to the inner cities and London. I have received a letter from Gwynedd, the other county in my constituency, which complains that resources are being transferred from Gwynedd to the inner cities. We have a county-by-county allocation, not an all-Wales allocation.
The result of the new system—it is a system that should have been introduced years ago, with the setting up of the Welsh Office—is that there will be an all-Wales allocation. There will be a discussion between the Assembly, taking over

from the Secretary of State and the Treasury in London, about the total amount of the block grant to the Assembly and the element of that which will be rate support grant.

Mr. Nicholas Edwards: Surely the only difference is that the counties will again write and complain that their resources are inadequate and that they are being transferred to the inner cities and London. The only difference will be that they will not be involved in the discussions, whereas previously, through their associations, they were involved in the discussion.

Mr. Thomas: The strong impression that I get is that the county councils feel that they have been bypassed in the negotiations that take place on an England and Wales basis. The allocation takes place on an England and Wales basis, on a county-by-county basis and does not involve an allocation to Wales.
The new system will result in allocation to Wales and the counties will be involved in negotiating the way in which that allocation will be divided amongst themselves. That is the basic difference that is proposed in the clause.

Sir Raymond Gower: The hon. Member made a point about certain Welsh counties complaining that money had been diverted. But for about 30 or 40 years the movements have been the other way. The money has been diverted from London and the richer parts of the South-East to the regions, including Wales, the North-East of England and Scotland. In all that time there has been no complaint. The complaints have been made by the big cities in England. That has been the general policy. This is an exceptional event which has not occurred for a long time.

Mr. Thomas: I was not complaining about the allocation of resources to the inner cities. As I said in the debate on the rate support grant order, when this reallocation took place, the issue of the allocation of resources to the inner cities was confused with the issue of how much of the resources should be allocated to Wales and the specific problems of the valleys and rural communities in Wales. With a separate rate support grant negotiation for Wales we shall be able to consider the merits of the relevant factors


in terms of a transfer of resources to Wales. That is a separate issue from the question of the resources allocated to the inner cities. It will not involve a county allocation within England and Wales. It will be a national allocation of the cake to Wales which will be split up, within Wales, among the eight counties and 37 districts.

Mr. Kinnock: How does the hon. Member think that a difference in the arrangements will change the attitudes of any authority in Wales to its own position on relative priorities? Will that change make any difference to the amount of money coming in or to the way in which those who need that money for different purposes will strive to get it? Will it make any difference in effect, or will it be just a different talking shop?

Mr. Thomas: As a Socialist, I happen to believe that the structure of government profoundly affects the quality of decisions made. I believe that the decentralisation of the rate support grant system will enable us to identify the needs of the Welsh counties more specifically and to argue those needs more cogently with the Treasury in London, and it will enable the Assembly to argue those needs more cogently.
At present, the rate support grant settlement is worked out—or at least the needs element is worked out—according to a complex regression analysis formula. The majority of factors in that formula—there is a consensus about this among social policy experts—are not really relevant to the bulk of the spending. We have extensive personal social service factors which do not relate to the bulk of education spending within the needs element of the rate support grant itself.
I should like the Under-Secretary of State to confirm that it will be open to the Welsh Assembly to decide the way in which resources are to be allocated within Wales, and I hope that he will clarify the sort of formula that might be adopted for the allocation of resources among the eight counties. I am not talking now about the allocation of the block grant from the Treasury in London to the Welsh Assembly. That was the subject of our earlier debate. I am talking now about the internal allocation

within Wales and how that will be done.

Mr. Dalyell: Why on earth should the hon. Gentleman think—to use his own words—that the Assembly could argue more cogently with the Treasury in London than could a man in the position of my right hon, and learned Friend the Secretary of State for Wales, who sits at the British Cabinet table every Tuesday and Thursday when it meets? As for cogent argument with the Treasury and cutting ice with the Treasury, surely a member of the Cabinet is much more likely to cut ice than is an Assembly that is somewhat distant from it.

Mr. Thomas: I do not accept that argument for a moment, because I believe that there ought to be a democratic tier at the lower level, and such a democratic tier—

Mr. Dalyell: That is an entirely different point.

Mr. Thomas: No, it is directly related. A democratic tier, with political representatives from the 36 Welsh constituencies, will have more political muscle than one member of the British Cabinet in terms of the way in which, as part of its responsibility, it will, be directly negotiating its block grant with the Government in London.

Mr. Nicholas Edwards: I am sorry to intervene again, but the hon. Gentleman keeps making the assumption that the Assembly will be negotiating the rate support grant. What ground has he for assuming that the Assembly will be involved in the year-long process of the rate support grant negotiations? Nothing has been stated by the Government. The hon. Gentleman may have some inside information. Can he enlighten the Committee?

Mr. Thomas: I was making two points and trying to distinguish between them, but the hon. Member for West Lothian (Mr. Dalyell) was confusing the issue, as he has done in earlier debates. I was being drawn to comment on the transfer payments through the block grant from the Treasury in London to the Welsh Assembly, although I was in fact talking about the internal allocation of resources within Wales.
When I spoke of the Assembly's being involved in negotiations about the rate


support grant, I was referring specifically to negotiations with the Welsh counties and the allocation within Wales. The negotiating over the external position will be undertaken by the Secretary of State as he negotiates the block grant for the Assembly itself, but obviously in those discussions the Welsh Assembly civil servants will be fully consulted and will be taking part in the total block grant allocation for the Assembly from the Treasury in London. Is that clear to the hon. Gentleman? If not, I am ready to give way again.

Mr. Edwards: The hon. Gentleman invites me to intervene, and I say at once that it is not clear. It is true that the Secretary of State will be involved in the negotiation over the block grant, but quite separately there will be a negotiation on the total of the rate support grant going on between the local authorities in England and Wales and the Government in Westminster. I posed the question earlier about the relationship between that negotiation and the quite separate negotiation of the block grant, over half of which will come from the rate support grant negotiation.

Mr. Thomas: I cannot comment in detail on what the Government consider the position to be, and I do not propose to do so. I shall merely put what I consider to be the logical position. In my view, the negotiations under the new structure should take place between the Welsh counties and the Assembly in terms of the internal allocation, and then negotiations should take place between the Secretary of State, on behalf of the Assembly, and the Treasury on the rate support grant element in the total block grant to the Assembly. To my mind, that would seem to be the logical position.

Mr. Nick Budgen: But will the hon. Gentleman concede the point that has been made, that where the Secretary of State for Wales is negotiating in the Cabinet or with the Treasury for advantages for Wales, he must always be in a much stronger position than would any representative of the Welsh Assembly in negotiation with—as the hon. Gentleman would put it—the English Government or English Cabinet, because the advantage which the Secretary of State for Wales has in negotiating is that as Secretary

of State he can trade his support or agreement on one issue with Treasury Ministers for agreement or support on another issue, whereas a representative of the Assembly has no bargaining position at any stage; all he can do is gratefully accept that which is given?

Mr. Thomas: With respect, the hon. Gentleman has added to the confusion because he seems to envisage Members of the Welsh Assembly in negotiation with the Cabinet. Under the Bill, negotiations on behalf of the Welsh Assembly with the central Government in London will be conducted by the Secretary of State on behalf of the Assembly. Obviously, Assemblymen can lobby Members of Parliament, but the actual formal negotiation will take place through the agency or, rather, the statutory powers of the Secretary of State. That is how it will happen, and I assume that the Secretary of State will have his arm strengthened in the Cabinet if he knows that he is negotiating on behalf of an Assembly which has arrived at and expressed a certain figure. His position will therefore be that much stronger in that he will be negotiating on behalf of the Assembly for the level of block grant which it considers will be adequate to meet all its commitments, including its rate support grant commitment.

Mr. Kinnock: The hon. Gentleman has used the phrase "on behalf of" several times, and I assume that he does so deliberately. Does he therefore see the role of the Secretary of State for Wales as being a sort of super-delegate mandated by the Welsh Assembly in order to assert the bids or aims made clear by the Welsh Assembly by resolution? If he does, how does he think that the Secretary of State could possibly avoid having to resign if he did not accomplish what he was required to do by the Assembly, or, on the other hand, how could he fulfil the function of being the intermediary between an Assembly which he did not represent and a Cabinet which would not listen to him?

Mr. Thomas: The hon. Gentleman is again taking us into a hypothetical scenario, and I shall follow him briefly along that line, although I do not wish to be drawn out of order. Let us consider the scenario for the rate support grant negotiations. The Welsh counties


negotiate with the Assembly about their relative needs. The Assembly then draws up a budget for the four-year cycle of its block grant, including its rate support grant component. Presumably, this is then presented to and discussed with the Secretary of State, who arrives at a figure as being appropriate for the total block grant allocation to Wales, including the rate support grant element. That is then subject to negotiation in the Cabinet.
That is my understanding of how the mechanism of decision will work. In my view, that mechanism, under which the Secretary of State is supported in his submission by an elected Welsh Assembly which has analysed in detail the needs of each of the eight Welsh counties, will put those Welsh counties into a far stronger position than they are now, being alongside all the other English counties negotiating their rate support grant position. That is my considered view, and that is why I say that this is a step forward from the present system.

Mr. Gwynfor Evans: Some of the points being made now were made in the debate yesterday evening, and someone who does have inside knowledge answered them, namely, the Minister of State at the Treasury. He said that in this matter of negotiation the hand of the Secretary of State would be very much strengthened by the existence of an elected Assembly in Wales. I think that we ought to accept that from one who knows from the inside.

Mr. Thomas: I am grateful to my hon. Friend for that intervention, but I should like to return to the basic question about which I was talking before I was sidetracked into talking about the relationship between the Treasury, the Assembly and the Secretary of State. I come back to my simple question to the Under-Secretary, the hon. Member for Rhondda (Mr. Jones), about the way in which the Assembly will be allowed by the clause to distribute resources within Wales. For those of us who represent constituencies in the North of Wales, the question of internal distribution within Wales is second only to the question of the distribution of resources to Wales.
8.0 p.m.
We have recently seen in the exercises of the area health authorities and the

reseource allocation working party in the Welsh Office, representing also the health authorities, an attempt to allocate health care resources more equitably throughout Wales. I hope that that will serve as a model for the distribution of the rate support grant moneys, rather than the model of the regression analysis formula which now exists to distribute rate support grant money.
I want to see a way of allocating resources which is related to the needs of the various counties. The kind of consultative machinery for distributing resources which already exists on an all-Wales basis should provide the basis for the Assembly's undertaking the allocation of resources within Wales.
Although the hon. Members for Aberdare and Bedwellty (Mr. Kinnock) always try to suggest that we are imposing a new tier of government, the resource allocation working party, the area health authorities in Wales and the health division of the Welsh Office are an all-Wales bureaucratic tier of government which is today allocating health care resources to all area health authorities in Wales. It is on the basis of the results of that working party that decisions are made about hospitals, about the building of a hospital which serves my constituency and that of the hon. Member for Wrexham (Mr. Ellis). It is according to that resource allocation Working Party that these decisions are now being made on an all-Wales basis through a bureaucratic system.
A similar thing happens in housing. The Under-Secretary recently set up his advisory committee on housing.

Mr. Ioan Evans: rose—

Mr. Thomas: I must finish this point.
The Under-Secretary set up his housing advisory committee, which has been looking at the way in which another block grant, the block grant for housing, is distributed within Wales from the Welsh Office to the housing authorities. Because of the problems of liaison between the Department and the underspending authorities within Wales, he has had to set up a consultative body. That body is discussing ways in which the housing investment programmes and so on will work to ensure that there is adequate monitoring of the funding to be disbursed from the Welsh Office to the district authorities in


Wales. This, too, will become a responsibility of the Assembly.
I hope that a similar monitoring system will function between the Assembly and the county councils in the distribution of the rate support grant. What I am pressing for is a flexibility for the Assembly in determining how it allocates its rate support grant within Wales. However that is to be distributed within the block grant from London, it is important that the Assembly should have flexibility to determine resources within the counties according to need. I now give way to the hon. Gentleman.

Mr. Ioan Evans: The hon. Gentleman has passed the point on which I wished to intervene. He was saying that my hon. Friend the Member for Bedwellty (Mr. Kinnock) and I had said that the Welsh Assembly was another tier of government. Is he saying that it is not another tier? How would he describe it, if it is not a tier of government?

Mr. Thomas: The hon. Gentleman is again making a Second Reading point.

Mr. Ioan Evans: I was referring to a point that the hon. Gentleman made.

Mr. Thomas: I made it specifically about the way in which resources were being distributed. I specified that there were non-elected agencies of distribution now operating on an all-Wales basis and distributing resources on an all-Wales basis. I tell the hon. Gentleman that the Assembly is not a new tier of government. It will be having the debate about who gets what in the Health Service openly broadcast in Cardiff.

Mr. Ioan Evans: It is a tier of government.

Mr. Thomas: It is a tier of democracy. It will be having the decisions now taken behind closed doors in Cardiff about the allocation of health care moneys, a matter of essential importance to the people of Wales, taken by a democratic Assembly. It will be having decisions about education spending and personal social services spending taken openly. The decision about how much Gwynedd, Clwyd and Powys receive will be debated openly, not behind closed doors in Cardiff or in London. That is the difference,

and that is what the hon. Members are opposing. They are against open government and democracy.

Mr. Kinnock: At what point in open government and democracy does the hon. Gentleman put the forging of letters by paid hacks of his party?

Mr. Thomas: This is not the first time the hon. Gentleman has made—

Mr. Wigley: Will the hon. Member for Bedwellty (Mr. Kinnock) repeat that outside the Chamber?

Mr. Thomas: Perhaps my hon. Friend will contain himself for a moment. This is not the first time that the hon. Member for Bedwellty has made allegations in the Chamber that have not been substantiated in the course of our debates on the Bill. I will defend the right of paid officials of my party or any other to write letters in a personal capacity expressing opinions when they disagree with my own views or the policy of my party at any time. It is a democratic right that they have, and if they want to use the office typewriter after hours, that is up to them.

Mr. Kinnock: Will the hon. Gentleman give way?

Mr. Thomas: I am not giving way again on that point.

Mr. Kinnock: The hon. Gentleman is misleading the Committee.

Mr. Ioan Evans: On a point of order, Mr. Godman Irvine. The hon. Member for Merioneth (Mr. Thomas) said that my hon. Friend the Member for Bedwellty (Mr. Kinnock) has been misleading the Committee. What he could well have been doing was to quote from an editorial in today's Western Mail, which said:
There are also reports that letters have been written above the signature of people who knew nothing about them but who do happen to be members of Plaid Cymru. The affair smacks of the sort of dirty trickery that is one of the less wholesome aspects of American politics.

The Second Deputy Chairman (Mr. Bryant Godman Irvine): That is a matter which is being dealt with in an Early-Day Motion, and it is not before the Committee.

Mr. Kinnock: Further to the point of order, Mr. Godman Irvine—

The Second Deputy Chairman: I have just said that it is not a point of order.

Mr. Kinnock: On a different point of order, Mr. Godman Irvine. The hon. Member for Merioneth (Mr. Thomas) accused me of not substantiating matters, as he said, not for the first time. I want that withdrawn, because it is quite inaccurate.
Secondly, may I have your ruling, Mr. Godman Irvine, on the practice of persons who occupy professional posts, are paid in those posts, and in order to deceive the public do not mention their occupation of those posts in communications with the Press and the broadcasting media? The matter was raised only because a reference was made to it in the debate. If in the course of a discussion that practice should be described as deceitful, or counterfeit, or a forgery, may I have your ruling on whether that is in fact an inaccurate use of those words?

The Second Deputy Chairman: What I have heard so far does not amount to any of those things.

Mr. Thomas: I am grateful to you, Mr. Godman Irvine. I will not be drawn any further on this issue, except to say that I defend the right of individual members of my party, whether or not they are paid by the party, to take part in any correspondence which they wish. But I shall not take this any further. I want to return to the specifics of the clause.
I want to pick up a point that the hon. Member for Aberdare made earlier, when he expressed horror that the distribution of health care resources and personal social services resources might be considered jointly. He was presumably quoting from a statement by the local authorities, by the seven members of the Welsh Counties Committee that support the view he supports on this clause.
I believe that in the context of the Welsh Assembly, considering health care resources and personal social services resources as one would provide us with a substantial step forward in joint planning for health care and personal social services care. The Assembly would provide an opportunity at an all-Wales level to perform the function of regional health authorities in England and perform a further function for the personal social services which RHAs cannot do,

because they are Health Service bodies. At present there is no regional forum within England where the personal social services can be debated or resources for them allocated.
Therefore, we shall have the added advantage in Wales of having the all-Wales allocation of health care resources and being able to dovetail into that the all-Wales allocation of the personal social services. This will take us a step forward in the whole movement. Indeed, within the NHS itself there is a second look at the relationship between the personal social services and the Health Service. Evidence has been submitted to the Royal Commission on the National Health Service which argues for this kind of joint budgeting for the health and personal social services as one unit.
I hope that when the Minister replies he will indicate that there will be flexibility for the Assembly, in allocating resources to take, if it wants, to the rate support grant alongside the allocation of its other resources—its allocation of the housing block grant, the Health Service block grant or the Health Service allocation to area health authorities, for example—so that it can look at the whole of social policy spending in an integrated way. That is another advantage of the Welsh Assembly that has escaped the Socialists opposed to the Bill. They do not realise that it will give us a perspective and opportunity to allocate resources on an all-Wales basis in a more flexible way.

Mr. Ioan Evans: I am grateful to the hon. Gentleman for giving way, because has has had a number of interruptions. We have been talking about the rate support grant and the fact that local authorities in Wales are getting similar grants to those in England at the moment. But this clause relates to the rate support grant "and other grants". Has the hon. Gentleman given some thought to the fact that there are certain requirements in Wales that are unique to Wales, such as the Welsh language and bilingual road signs, and, more recently, to the fact that the Secretary of State has given £250,000 to the national eisteddfod?

Mr. Kinnoch: Quite rightly.

Mr. Evans: Yes, quite rightly. Indeed, in an Adjournment debate I supported


the proposal that the money should go to the eisteddfod rather than to road signs. If we are to create an Assembly, will the Secretary of State have the power, in addition to the block grant, to make these extras available in Wales to meet such essential needs? Will that be affected by the Assembly?

Mr. Thomas: The hon. Gentleman talks about goodies and extras; I am talking about an integrated approach to policy-making in Wales which is cost-effective. Let us take the hon. Gentleman's argument about cultural spending. There has been the allocation to the eisteddfod. That kind of allocation would fall within the powers of the Assembly under the relevant clause to do anything it wished in support of the Welsh language. Presumably, the Assembly would have the power and could take a democratic decision to make this kind of ad hoc spending.
But the important thing is that the Assembly would not be making ad hoc decisions. It would, I hope, have its own cultural policy committee, which, unlike the Welsh Language Council, set up with great fuss by the Conservative Government and now disbanded by the Secretary of State—which means that there is no single body taking an overall view of linguistic policy in Wales—would be able to take a continuing look at the cultural needs of both language communities—English and Welsh.
My great hope is that the Assembly will result in two things. First, it will mean that in terms of grants and resources, Welsh-speaking people, who are demanding more resources for the Welsh language, will not be able to blame the Government in London because those resources will be coming from the Welsh Assembly. English speakers in the Assembly will be called upon to take up a cultural responsibility towards the development of the Welsh language.
The Assembly will therefore provide us with a forum for debating cultural policy, for creating an effective cultural programme for the restoration of Welsh and for giving the resources to do it. That is the kind of debate we never have on linguistic policy in this House, despite the fact that half a million inhabitants

of these islands speak Welsh as their first language.

Sir Raymond Gower: Has the hon. Gentleman reflected that a grant for the Welsh language or the Eisteddfod might well be more forthcoming from the Secretary of State for Wales or this House than from a Welsh Assembly dominated in numbers by those who, in some counties like Mid-Glamorgan, seem disinclined to make such grant?

Mr. Thomas: I do not accept that for a moment.

Sir R. Gower: But it could happen.

8.15 p.m.

Mr. Thomas: It could happen. What I said was that the placing of responsibility for cultural policy in a Welsh Assembly, the majority of whose members would be English-speaking, would place on that English-speaking majority a clear obligation, which I am certain that they would take up, towards the minority language. That will give us the opportunity to develop a continuing cultural policy—not an ad hoc allocation of grants to the national eisteddfod and so on, however worthy the motives or the timing may be for such grants. The Assembly will provide us with an opportunity to develop an effective cultural policy in the allocation of resources.
Hon. Members who oppose this new structure for the rate support grant have talked as though in this House we have a full and detailed debate, a full scrutiny of the allocation of the grant, before and after. But it never happens like that. Indeed, it is very difficult to obtain the actual figures for the counties. I do not want to be awkward or critical of the Under-Secretary of State tonight, but I have failed on a number of occasions to get as rapidly as I would like figures of the detailed allocation and implication of the rate support grant needs element for the various counties in Wales.

Mr. Alec Jones: Will the hon. Gentleman confirm that he said that timing was the problem and not reluctance to give figures? I understand and accept that sometimes all of us have to wait a little longer for figures than we would like, but I would hate to think that we were being accused of not being willing to provide the figures.

Mr. Thomas: I never accuse the hon. Gentleman of being unwilling to provide figures, except that sometimes he tells me that information is not available. But of course I accept his word on such occasions. The timing of information very often makes it impossible for us effectively either to lobby on behalf of our counties or to make what we feel to be a justifiable case which has been presented to us in writing by local authorities in our areas.
The implication coming from local authorities tonight, in the mouth of the hon. Member for Aberdare is that somehow the present system is effective and adequate, that somehow they are getting a fair allocation of resources under the present system, yet they are continually complaining to us, in every round of rate support grant settlement, about distribution—not only about the global allocation to local authorities of central Government expenditure but about the way in which the detailed resources are distributed.
That is the kind of thing that could adequately be discussed between the counties and the Assembly and could be allocated within Wales itself.
The way in which the rate support grant settlement for Wales is reached should reflect the real needs of the Welsh counties. I do not want to rehearse again the arguments that we had last night or earlier today about the level of public expenditure within Wales and the level of the block grant. I am talking specifically about expenditure in Wales which requires to be increased because of the relatively greater need. I take specifically the case of the personal social services.
We have a higher proportion of population over 65, and particularly over 75, and are therefore in greater need of personal social services provision—home help, day care and so on. We have a higher proportion of disabled—13·1 per 1,000 households in Wales compared with 10·2 in England. We have a higher number of children in care, particularly in Mid-Glamorgan and other local authority areas in South Wales. We have higher rates of mental illness in Wales. There is also the additional on-cost of providing services over a sparsely populated rural area such as Mid-Wales.
We also have a lower proportion of trained staff in personal social services.

We have a lower ratio of staff to clients in community homes and other institutions in the personal social services. We have a low level of provision within the personal social services for the mentally handicapped in Powys, Gwynedd and Dyfed. We have lack of provision for day care. Indeed, the expenditure on day care by local authorities is about one-thirtieth of the provision in England. There are many other examples that one could take to show that the provision of personal social services in Wales is on a lower level than in England.

Mr. Wyn Roberts: The hon. Gentleman has given us a clear picture of the detailed needs of the Principality. Much can be made from the rate support grant and so on. Who does he think will put this case forward for increasing the grant? Will it be the Assemblymen, the local authorities or Members of Parliament?

Mr. Geraint Howells: All of them.

Mr. Thomas: That intervention by the hon. Member for Cardigan (Mr. Howells) is the short answer—they all will, but at different levels and in different ways in the decision-making process. The scenario is that the Assembly has discussions with the counties and draws up its four-year budgetary cycle for devolved local government services. That will presumably be negotiated with the Welsh Office, the Secretary of State will make representations to Cabinet and Treasury about that level and it will be subject to an order in this House. The Assemblymen will be involved in fighting on behalf of their own areas and for the total resources for Wales, while Members of Parliament with Welsh constituencies will presumably be backing them and the Secretary of State will be negotiating for an adequate block grant and RSG element.
I am describing the relatively greater needs of Wales in personal social services—and in the National Health Service. The figures for the latter are not relevant to this clause but are relevant to my view that there should be joint planning of both services.
The argument of the hon. Member for Aberdare last night was that Wales has additional public expenditure—although the additional expenditure on the


devolved services which are part of the RSG settlement are not all that great. Expenditure in Wales on education, libraries, science and the arts, for example, on the 1976–77 provisional figures, is no higher than the United Kingdom average. Nor is the health and social services provision, although it is slightly higher than the figure in England alone.
Despite the argument that there is higher public expenditure in Wales on health and personal social services, I believe that it should be even higher by means of the block grant, because of the greater need. The hon. Member for Bedwellty argued last night that we received handouts, that that was fine and that it was essential to maintain the present position in a devolved Assembly. What he fails to admit to himself and his constituents is the reason that we have to live on handouts—because the level of personal incomes in Wales is 40 per cent. down, social security receipts are 20 per cent. up and housing conditions are 50 per cent. worse. Our record of social conditions is matched only by the North-East of England, in some aspects and on some social indicators.
So when I argue for the Assembly to be able to allocate the rate support grant, I am arguing also that it should demand the resources to meet the needs. Those are the historic repayments which have to be made for the effects of centralist British capitalism as it has been operated by successive British Governments in Wales.

Mr. Grist: Is not the hon. Gentleman arguing for the Assembly to have taxation powers? Is this not the argument that will be coming out of the Assembly—that it would wish to increase its support to local authorities had it but the means to do so, that the people preventing it were in this House and that the only discipline to make it honour its words would be the power of taxing the people of Wales directly? Does the hon. Gentleman think that the Assembly should have the right to blackguard this House and blackmail the rest of the United Kingdom?

Mr. Thomas: I will not be drawn on that in detail, because it is not relevant to the clause. However, I do not believe in the transfer of taxation powers unless

one transfers to Wales all other measures of fiscal and economic control. Only then is it logical to take all aspects of the control of expenditure and raising of revenue so that one can operate the full range of fiscal policies. Only then would I be in favour of the transfer of taxation powers.
The hon. Member for Bedwellty pleaded last night for further handouts for Wales. The reason that we receive higher per capita public expenditure on a number of counts—although not those that we are discussing—than throughout the United Kingdom as a whole is that we are in a peripheral relationship to the core of the United Kingdom economy and Government, and have been throughout our modern history. That is why we have a lower level of personal incomes and a higher level of social needs.
I disagree fundamentally with the hon. Member for Bedwellty, who is a centralist, Stalinist Socialist. His view is that resources can be distributed adequately only through a central mechanism. My view is that the Assembly will give us a Wales-based mechanism for distributing resources more effectively and for demanding adequate resources for Welsh needs. That is where we disagree—not about the level of resources required but about the way in which they are distributed, the essential link in economic and regional policy between where government is and what government does and the fact that centralist interventionism in Britain has not managed to solve our regional disparities.
It is only by the transfer of fundamental powers from the centralist system of Whitehall and Westminster to Cardiff, Edinburgh and the English regions that one will achieve a greater geographical equality within Britain.

Mr. Kinnock: This is not in the Bill.

Mr. Thomas: Part of it is in the Bill. That is why I support the Bill and why I welcome the clause as a fundamental step forward in the allocation of rate support grant moneys to Wales.

Mr. Dalyell: I shall be brief, because it is with some temerity that I take part in a debate on Welsh local government. My hon. Friend the Member for Bedwellty (Mr. Kinnock) is waiting to speak. He has been called a Stalinist and various


other things, but I am sure that he can more than answer for himself and does not need my defence.
Who wants this Bill? I am entitled to ask that. We have heard a long—I do not complain of that—and at times passionate speech in favour of the Bill from the hon. Member for Merioneth (Mr. Thomas). But I hope that my Front Bench will note from whom it comes—not from Members of the Labour Party but from Plaid Cymru.
As a matter of record, let me name my Labour colleagues who are here. There is my hon. Friend the Member for Gravesend (Mr. Ovenden), who voted against the Scotland Bill. If he is not actually in the Chamber, he is observing the debate. There are also my hon. Friends the Members for Bedwellty, for Aberdare (Mr. Evans), and for Bebington and Ellesmere Port (Mr. Bates), who is a Whip, and, of course, my hon. Friend the Under-Secretary of State. That is on the Government side. There is also present a supporter of the Bill from the Liberal Party—

8.30 p.m.

Mr. Geraint Howells: The hon. Gentleman should show respect to his hon. Friend the Member for Wrexham (Mr. Ellis), who has just left the Chamber, having been here all afternoon.

Mr. Dalyell: My hon. Friend the Member for Wrexham, of course, wants something very different from the Bill, as he has demonstrated. Let us recall that the hon. Member for Wrexham is on the way to do his duty in Brussels. He can certainly be acquitted of any charge of not attending.
I have four questions to put, if I could have the attention of my hon. Friend the Under-Secretary—

Mr. Alec Jones: I find that remark offensive. I have listened to and put up with more drivel talked by my hon. Friend in the last few days than from any other Member of this House.

Mr. Dalyell: I was just trying to be helpful in asking these questions. However, if I have talked drivel, I can only say that I asked questions that a great number of my colleagues have also been asking, so that there is a great deal of drivel being talked, apparently, in the

Minister's view, by his hon. Friends. But, of course, it was not always so. I will leave it at that.
My first question is this. What is the extra cost of the mechanism of putting in an Assembly as an extra tier to deal with the rate support grant? It may be very small. I am asking about the manpower and financial costs, because presumably this should be known.
Secondly, is it not a fact that in the Scotland Bill and in the Wales Bill, raising moneys through the local authorities to finance an institution other than the local authorities will create a great deal of trouble? The people who have to raise the money will incur the odium of raising cash that they are not responsible for spending. Scottish local authorities are kicking up rough about what they now see as a back-door way for the Assembly to raise money.
I ask whether there have been consultations with the Welsh local authorities, and whether they clearly understand that this is a back-door way of raising money. Do they understand the position in this respect? I do not want to interfere in Welsh affairs, but if the position is anything like that in Scotland, there will be a great deal of difficulty about it. What I am geting at is the correctness and propriety of the principle of raising money through one institution to be spent by another institution.
Thirdly, I refer to a matter which has been raised throughout the debate, and I should like to put this in the form of a question. The argument is not about the loyalty of civil servants. We all know, of course, in the context of the British Civil Service, that whenever an Administration changes, it is perfectly easy for civil servants to transfer with complete loyalty from one Administration to another.
What is different about this new situation is that it apears that the same civil servants will have to have different loyalties concurrently. It is one thing to serve, for example, a Conservative Government one weekend and, after a General Election, a Labour Government the next weekend, or vice versa. That is no problem in terms of the Civil Service. What is a problem is the idea that the same civil servants should concurrently give advice,


shall we say, to a Labour Chief Executive in Cardiff and to a Conservative Secretary of State for Wales in Westminster. This issue has not yet been dealt with.
I see that my right hon. Friend the Home Secretary has joined us. He is most welcome, if I may say so, to these debates. He, as a senior member of the Government, will recognise this problem very well. I believe that it is time that we had an authoritative answer to a question which has been raised constantly in these debates, because so far no answer has been forthcoming on this delicate issue.
In fact, I take the view of the Civil Service unions that there will have to be a massive duplication if the system is to work at all. Of course, massive duplication leads to increase in costs.

Mr. Kinnock: I enjoyed my hon. Friend's reference to our right hon. Friend the Home Secretary. One of the ways in which the Prime Minister marked his warm affection to the Home Secretary was to give him absolutely nothing at all to do with devolution.

Mr. Dalyell: Our right hon. Friend the Home Secretary is a very shrewd politician and perhaps, with that clear instinct of political reality, he knew when to get involved and when not to get involved. I suspect that those famous political antennae of my right hon. Friend warned him at an early stage that it would be as well to concentrate on more relevant matters to the future of the Government than matters of devolution and to give them a wide berth, The Home Secretary is a wise man and in this, if he took nothing to do—

The First Deputy Chairman (Sir Myer Galpern): I hope that the hon. Gentleman will not forget the Chairman.

Mr. Dalyell: Sir Myer, when you are Chairman, how can I conceivably forget the Chairman? One of the difficulties of this whole debate is that we are now on day 36 or day 37. I should have liked to see a number of the more senior members of the Government in other Departments involved, because we have the classic instance of my hon. Friend the Minister of State at the Treasury who spoke last night as if it were day 2 rather than day 36 of our proceedings.
I shall be guided by you, Sir Myer, with regard to my final point. At some stage we are due to discuss Schedule 7. Would I be in order under this amendment in asking, first, about the future of the Forestry Commission in relation to the Assembly and, secondly, of the Inland Waterways Board, both of which have protested strongly about the possible break-up of the Forestry Commission?

The First Deputy Chairman: Order. I think I ought to correct the hon. Gentleman. We are not discussing an amendment. The hon. Gentleman has got lost in his own argument. We are discussing whether Clause 60, as amended, should stand part of the Bill.

Mr. Dalyell: If forestry is to be taken at a later stage, then I give my hon. Friend the Minister warning that I shall ask him at a later stage whether Welsh forests are to be run from Edinburgh, London or wherever or if there is to be fragmentation. I give my hon. Friend that warning now.

Sir Raymond Gower: I imagine that any chance listener to this debate would wonder what we have been discussing. It is right that the Chair has shown a certain generosity in interpreting the discussion on this clause because it is rather an important one. It is one of the vital parts of this Bill.
As my hon. Friend the Member for Pembroke (Mr. Edwards) pointed out, this clause gives the Assembly the function and the duty of distributing the rate support grant to the local authorities in the Principality. This is an unusual format because it is difficult to think of many constitutional arrangements where one has an elected Assembly whose main function is merely to distribute. That is why many of us are anxious about the durability of such an Assembly. The hon. Member for Aberdare (Mr. Evans) has repeatedly pointed out in his interventions the unusual nature of this function and the fact that the Assembly will not have the much more unpopular duty of collecting this money.
In reply to the hon. Member for Merioneth (Mr. Thomas) who made some interesting observations, I agree that there is a lot to be said about the advantages of democratic discussions. But in relation to this clause the assessment of the rate support grant has been worked out


on a highly sophisticated and scientific formula—

Mr. D. E. Thomas: The formula is wrong.

Sir R. Gower: The hon. Gentleman may say that, and I am quite ready to admit that it is imperfect. However, it has been evolved by trial and error over many years and every attempt has been made by successive Governments and those who advise them to forge an instrument that will meet the differing requirements of different areas.
We are proposing to transfer this very difficult operation of assessing the requirements of different local authorities to another elected body. This elected body will be an emotional and political assembly which is subject to all kinds of pressures, and this will not make sophisticated and scientific judgments any easier. Therefore, the advantages of democratic participation would appear to be less desirable in this function that we are discussing.
It is conceivable that with experience the Assembly could do the job. I hope that this will prove to be the case, and I hope that the fears expressed by the existing local authorities in Wales will prove unfounded. But let us not blame the local authorities for having these fears because the very way in which the Bill was drawn up gave rise to them. It includes a clause to give the elected new Assembly, as one of its first duties, the task of examining the structure of local government organisation in Wales and reporting to the Secretary of State. This task is not calculated to inspire much confidence in the local authorities.
Indeed, this is a highly undesirable clause in a Bill of this kind. A newly-elected Assembly of this kind is the least proper and suitable instrument to assess a system of local government which has been running far longer than the people who will examine it. This is one of the most objectionable features of the Bill.

Mr. Geraint Howells: If the hon. Member is against the Welsh Assembly Members looking at the organisation of local government in Wales, who does he think should be responsible for this task?

Sir R. Gower: All I have said is that the last person in the world who should

look at it should be a newly-elected person to a new body. Yet he is being asked, as one of his first duties, to study an established system which has not really had enough time to settle down since its reorganisation.

Mr. Ioan Evans: Will the hon. Member agree, first of all, that we do not know whether any of the people who are elected to the Welsh Assembly will have local government expertise? They may have it, but as yet we do not know where they will come from. Obviously, if the Assembly is to work in the long term, it will have to remove the other tiers of local government. Therefore it will not approach the task objectively. It will approach it with a view to removing the tiers underneath. For this reason NALGO is very disturbed about the fact that the Assembly is to be set up, because of the threat facing local government.

8.45 p.m.

Sir R. Gower: I am fully aware of all these considerations, and at an earlier stage I commented on the position of those employed in local government, such as NALGO members and members of one or two other associations. Let us hope that these fears will prove to be exaggerated.
If we pass this clause as it stands, it will give the Assembly a duty to distribute grants to the local authorities out of the Welsh Consolidated Fund. I am glad that the Minister gave an assurance that local authorities will be consulted before any such decisions are made, because there appeared to be a good deal of doubt on that matter.
There is a danger that when these negotiations begin, the local authorities may, nevertheless, not have as full consideration under the new system as they have had under the old. If anything the Minister says can remove that fear from the minds of those in the authorities, it will serve a good purpose.
The other point which has arisen is that it seems possible that the Assembly could distort the aplication of this grant. Perhaps I am using an unfortunate phrase, and I do not want to be unfair, but it seems to me that they could hold back distribution of the grant, or delay it or be niggardly in its application. This could impose on local authorities the


obligation to levy more of their resources out of rates—not a popular or desirable function.
The Government stated in an earlier publication that in calculating block grant the Government would assume that Welsh local authorities would receive in relation to their expenditure needs provision comparable with that of local authorities in the United Kingdom as a whole. I hope that that will be the case, but I wish to ask how that situation can be enforced once the Assembly is set up.

Mr. Harry Gourlay (Kirkcaldy): Let me say at the outset that I am in favour of devolution and not against it, but surely the hon. Gentleman is arguing that he has no trust in an elected Assembly for Wales. In other words, he is saying that hon. Members in this House—Members from English, Scottish and Northern Irish constituencies—have a better knowledge of how to distribute block grant in Wales than will Members of an elected Welsh Assembly. Surely that is not the case.

Sir R. Gower: No, I do not take that view, but it would surely be the case that newly elected Assemblymen will be less experienced than hon. Members in this place who have been undertaking this job for many years. The Assemblymen will be more subject in some respects to certain pressures than the Secretary of State would be. He will be answerable to this House but will not be subjected to the kind of pressures which may conceivably be exerted on Assemblymen.
In posing these questions I have stressed that I hope that some of the fears which have been expressed are exaggerated and will prove to some extent to be unjustified. The fears of local authorities have been caused partly by the inclusion in the Bill of a clause giving the Assembly power to examine the needs of local authorities and to report to the Secretary of State. Local authorities naturally fear that they will not have such an objective study of their needs as they have enjoyed in the past, but rather a more subjective study by Assemblymen. Whatever the defects of the old system, it was objective and was carried out in a scientific rather than a political mood. We are not so sure about the Assembly, which will be a much more political operation.

Mr. Kinnock: The hon. Member for Merioneth (Mr. Thomas) made, for him, extensive comments about me and among the least charitable, though not the least charitable, was to equate me with someone called Stalin. In order to reassure the hon. Gentleman and the House, I should tell hon. Members that I once took the name Stalin as a nom de plume in an inter-college eisteddfod. But it was the name Llewellyn Stalin, and I am happy to report that I won third prize in the handicrafts competition, much to my surprise and to the illumination of the person who marked my entry, which was a stone inkwell.
However, if the hon. Gentleman was talking not about Llewellyn Stalin but about Joseph Stalin, I must remind him that Joseph Stalin was the father of the sort of devolution being proposed in the Bill and to which I so strongly object. The Russian system operated for many years—and, sadly, still not substantially changed even since Stalin's passing—so as to retain centralist control while giving the appearance of allocations to the constituent Soviets of the Union of Soviet Socialist Republics.
I would not accuse the Government of drawing inspiration from the Soviet constitution or the dreaded memory of Joseph Stalin, but if anyone has any Stalinism in him, he must continue to worship at the shrine of the Wales Bill. I do not count myself among that number.
On the contrary, I am for the diversification of decision making, the devolution of financial control and many of the things that the hon. Member for Merioneth and the Government say that they are for. But I am for these things for all the people, because I believe that sort of devolution to be a virtue of itself and a necessary development for our democracy. The Government and the nationalists, for a mixture of motives, are for these things for entirely different reasons, and for only some of the people for part of the time.
The hon. Member for Merioneth also characterised some of the remarks that I made yesterday as being an acceptance of, or even showing enthusiasm for, handouts. Since the per capita expenditure from public resources is higher in Wales than in many other areas while subscriptions through various forms of taxation


from Wales, because of its great economic disadvantages, to the central Exchequer, are smaller than in many other regions of the United Kingdom, we run a public expenditure deficit. I do not consider that deficit to be in any sense a handout. I think that that is allocated, especially in the context of this debate on the gate support grant, on the basis of proven, demonstrated need which has been argued for through democratic channels by people who have been democratically elected at local government level, at national level, all of whom must submit themselves and their judgment for democratic assessment at elections at local and national level.
That is not perfect. There have not been hon. Members on this side of the House to make defences of the Bill, but when Conservative Members characterise the view that we express about the present system of deciding upon and making allocations of rate support grant as being contentment with the current system, they show either an elementary misunderstanding of all that we have been saying or they are deliberately misrepresenting what we have been saying, because it is far from perfect.
I repeat that our function in deciding on the Wales Bill and on the whole proposition of devolution is not to describe necessarily what is wrong now but to decide whether the Bill will make the people of Wales better off or worse oft. If it is to make them worse off, in our considered opinion, it is our business to throw it out. By saying that we are not expressing contentment or complacency about the current system. I am at least as critical of the operation of this system as Conservative Members, but we do not clear the problems of this system by creating another dimension of the problems to the disadvantage of the people of Wales and the United Kingdom by implementing the Bill. I am glad to repeat my absolute confidence that at the referendum the people of Wales will entirely reject the Bill and so save us that problem.
Opposition to the Bill—I must ask the hon. Member for Merioneth to desist in future from putting his construction on these words—does not mean a full-hearted sympathetic endorsement of the system that we have at present.
I want to address questions to the hon. Members who have gone to some lengths

poetically to describe what is wrong with Wales, how miserably poor it is in many respects and what the apparent causes are of that poverty. It is because of an ageing population, because of geographical difficulties and inherited problems arising from industrial and environmental pollution, because of deficiencies in diet during childhood and a dozen other social and economic causes which mean that Wales is heavily dependent and insufficiently provided for in its needs for personal social services, health services and so on. I have to ask hon. Gentlemen who described the situation so accurately not even what they would do about it if they had responsibility for bringing succour and change and answering these problems, but, in the context of devolution and the rate support grant, where they would make the cuts in other provisions. From whom would they steal in order to improve the allocation of personal social services were such decisions to become the business of an Assembly in Cardiff?
The point that they have to answer is not a description of the problems. We are not interested in this debate in sporting chips on shoulders. We want to know which chips will be removed from whose shoulders and who else will have to suffer a bigger chip in order to assist with the alleviation of the burden on somebody else. Without additional resources we are left with only the description, the misery and the tears and without any answer to the question posed by devolution.
If the Welsh Assembly has responsibility for the allocation of resources, will it have any more influence on getting more resources from the central Exchequer? From everything that I have heard this afternoon during the debate my answer to those questions is that it cannot, because of the dangers of demarcation of Wales from the remainder of the United Kingdom. The Welsh Assembly cannot have any more influence because in no way does that constitutional change reduce the problems of Wales or assist us by providing extra resources to meet those problems.

9.0 p.m.

Mr. Dalyell: These resources are finite. Does not the expense of the Assembly itself—a considerable and mounting expense, as we have discovered—come out of precisely these resources?


Is it not therefore true that all the desirable things that have been outlined by my hon. Friend and by the hon. Member for Merioneth (Mr. Thomas) will suffer because of the extra administrative costs? Is it unfair to say that every pound spent on setting up the Assembly is a pound less for home helps and other desirable services? Is that an exaggeration?

Mr. Kinnock: What my hon. Friend says is precisely the case. We have had difficulty in finding out so far the areas of need that those who support the Assembly will deny resources to in order to pay for this panoply of power in Cardiff. Whose personal social services will they reduce? Whose roads programme will they abbreviate? Whose health services will they make less effective and financially less secure in order to find the money?
The general secretary of Plaid Cymru, who is as little renowned throughout Wales for his veracity as he is well known for his counterfeiting capacity, says that the cost of the Assembly will come to less than a penny a head, or less than the cost of military bands. But they are not the questions to be posed in the devolution debate. We are not talking about a penny a head. If we were to levy a penny a head in Wales, I am sure that the people could think of a much better reason for paying it than providing and equipping an Assembly in Cardiff to talk about next to nothing. If they were voluntarily to subscribe a penny, that would amount to £15 million, which would provide nearly the whole of a modern district general hospital. It would build getting on for 10 comprehensive schools. I am sure that if the people of Wales had to make that subscription they would prefer to do that rather than endow second division MPs with all the pomp and circumstance of an Assembly in Cardiff.
That is the point on which we have yet to receive an answer. The question is, who would pay? I doubt whether even until the eleventh hour of the devolution debate leading up to the referendum we shall get an answer to that question because it is unanswerable in any terms that could be acceptable to the Welsh people who are much more conscious of their material difficulties and their social deficiencies than they are of any constitutional problems that Members in this House might have distinguished.
The hon. Member for Merioneth said that the problems arise from centralised British capitalism. As an historical point I should point out that the problems that the rate support grant assists in trying to combat arise not so much from centralised British capitalism in Wales as from capitalism. I do not say British capitalism because capitalism knows no nation as the hon. Member has probably realised in the course of his Socialist learning on which he reports to us on occasions.
The problem we encounter in Wales is the result of diversified entrepreneurial capitalism that ripped the guts out of North and South Wales and has subsequently put nothing back. It has nothing to do with capitalism being centralised. In many ways there is nothing more diversified than capitalism. It moves like the air. It is all over the place. It does not centralise itself. Capitalism has a finger in every pie in every part of the world. It is not therefore the centralisation of British capitalism but the existence of British capitalism that has caused us historic misfortune. The hon. Member will not get away with trying to equate his Socialism with an anti-centralist posture, because they do not come to the same thing.
There are other areas in which the hon. Member has a different concept of these issues. There is a major difference of conception that is general among nationalists, whether we are talking about the rate support grant or anything else. They are the only people who consistently make speeches, other than my right hon. and hon. Friends from the Government Front Bench, in favour of the Bill or the clause now being discussed by the Committee. The nationalists are the only people who speak in the Bill's favour systematically, consistently or insistently. However, the fact is that they do not really want the Bill.
It again became apparent from the speech of the hon. Member for Merioneth that the greatest applause that he could offer the Bill is to say that there are the beginnings of something in it. However, he is more impassioned and more repetitive—I say that without any pejorative use of the latter adjective—in his support of the Bill than any right hon. or hon. Members from the Labour Benches.
That must strike my right hon. and hon. Friends as peculiar, but there are other areas where the hon. Gentleman has a different conception. He says that he wants resource allocation in Wales to be more cost-effective. So do I. Socialist are by nature good husbanders of the nation's finances. We have a case to prove. We want to ensure the maximum beneficial use of resources. That is why we are in favour of planning. We want resource allocation to be made more cost-effective. I do not see how we can do that when we duplicate bureaucracies, when we duplicated civil services, when we have resources allocated to an Assembly that are unnecessary and unwanted. I do not understand how we can have more effective resource allocation if we are multiplying tiers of government and duplicating functions.
We are running UD a massive Bill without any guarantee of improved resource allocation, and certainly not in respect of rate support grant allocation. The hon. Gentleman says much the same as my right hon. Friend the Minister of State to the Treasury said last night. The hon. Gentleman says that there will be open discussion and debate in the Assembly at Cardiff that will mean improved allocation of the rate support grant together with the other resources allocated to Wales.
It seems that the Assembly will be something of a novel political institution not merely in the British context but against the background of any pluralist democracy anywhere in the world. It appears that the Assembly, in its open discussion and debate about how to allocate resources, is not to have any Whips or party lines. No one will fight an election on a manifesto. No undertakings will be given to the public. The only undertaking will be to have open and free debates.

Mr. D. E. Thomas: Who said that?

Mr. Kinnock: Reality says that. History says that. Acquaintance with everyday life in politics says that.
We are familiar with the present machinery for deciding the rate support grant. The Government and the hon. Gentleman say that that machinery is to

be replaced with open discussion about how we are to spend the money. Apparently that discussion will take place in the Assembly. We are asked to believe that partisan considerations will not enter into its debates, let alone geographical considerations. It is said that the Assembly will arrive at a universally suitable and acceptable formula for the allocation of finances in Wales because its debates will be open and free. That is the proposition that we are asked to accept, but it is totally unrealistic. We shall get the same hackery, whippery and the same divisions of partisan opinions in the Assembly with the same advantages and inadequacies that we get in this place. The only difference will be the duplication of the process that already exists.

Mr. D. E. Thomas: The hon. Gentleman is taking us on an incredible hypothesis of how the Assembly will operate. In fact, the Assembly will operate in terms of political realities. No one is denying that. We are saying that, given the allocation of priorities within a political system based on Cardiff and representative of all areas of Wales, the result will be a fairer political allocation. The allocation will be political in the sense that all government machines are political. The balancing of resources between the various areas will have to be politically acceptable to the whole of Wales because it will be democratically scrutinised by the whole of Wales. It is not being suggested that the Assembly will function non-politically. We are saying that it will have to function as a representative political body. The Assembly will be answerable to the electorate and if it is not representative it will be disposed of in due course.

Mr. Kinnock: I understand. I have a much clearer understanding now. What we have, in fact, is much the same political division on a similar model to that which we have in the House of Commons, although I am not saying in exactly the same proportions at all. Indeed, I realise that one of the reasons why the Welsh nationalists support devolution is the hope that they can enhance their general representation by occupying this springboard that they will have in Cardiff. One of the reasons why I am against devolution is that I am against that.
We are to have a political Assembly, says the hon. Gentleman, and decisions will be taken on a political basis. I say to the hon. Gentleman, therefore, that if they are to be taken on a political basis—to use his words, not mine—on a geographical basis, where is the fairness or advantage to the people of Wales in that respect? The advantage is that it will be their own countrymen who are perpretrating injustices, to use a favourite nationalist phrase, or indulging in inadequacies or incompetence, and it is that awful centralised Cardiff Government that is ruining everything, assisting that awful centralised Westminster Government that has ruined everything before. I understand exactly what the hon. Gentleman says.
Even if he is not saying that, what we are asking, especially in the context of the rate support grant—I continually remind myself, Sir Myer, that that is what we are talking about—is that instead of allocations now being made universally to local authorities in order to assist them with the particular problems and difficulties that they have, the Welsh Assembly will exercise priorities on a national basis. I tell the hon. Gentleman this, even if he does not recognise it himself. If for the sake of the national interest of Wales, his constituents in Merioneth should be denied a mile of roadway, a hospital ward or a new school because my constituents in Bedwellty are getting a new vast improvement in their personal social services, I expect that he or whoever represents Merioneth in the Assembly would be rather circumspect about his enthusiasm for the national Welsh priority being decided in the aforesaid Assembly.
Even if that is not the case, even if there is a new era of tolerance in Merioneth, even if there is an acceptance of this national priority, whoever represents Aberbargoed in my constituency certainly will not allow any theology about the national Welsh priority to blind him to the immediate needs of that area. If as a consequence of devolution that area in my constituency gets a farthing less than it has got previously, in comparative terms, the Welsh national priority decided by the Welsh national Assembly can go to hell as far as the people of my constituency are concerned.
That is not the assertion of an ingrowing parochial jingoism. It is a statement of fact. It is an assertion of the duty that I expect all representatives in my area, regardless of their political colour, including myself, to have towards those who elected them. That is their prime consideration and prime duty.
The idea that instead of having allocations of rate support grant related directly to local needs—argued for directly by local authorities, meeting local bills and assisting in that process—we can make the allocation of £250 million or £300 million or whatever hundreds of millions of pounds it is to the Welsh national Assembly and have it decide on the priorities at that centralised level, will not be on, and we shall not tolerate that. It is a formula for the most immense division between the competing claims of different areas of Wales.
There is no virtue in secrecy. I believe that we could greatly democratise and open up our present procedures. There is no reason for them to be conducted in any secretive way. Indeed, if we had universal devolution, it might assist in the process of that debate. But the proposition before us is that only two areas of Britain shall have devolution. In the case of the area that concerns me and the hon. Member for Merioneth most, this particular kind of devolution will mean that we shall have to be dogs fighting over a bone of limited size. It is a devolved bone, a condescending bone, and one decided not by the people of Wales, even at the local authority level, but entirely on the basis of priorities decided outside Wales, awarded to Wales in a lump and simply requiring us to fight with each other over the allocations. That is not the kind of Wales that the hon. Member for Merioneth wants and even if he wants it it is certainly not one that I could accept. But it is inescapable when we have devolution financed by a block grant and a rate support grant bundled together and tossed to a Welsh Assembly so that its members can scrabble over it like cats over bits thrown from a table.
9.15 p.m.
The hon. Member for Merioneth says that decentralisation—to use his words—can have a profound effect on decisions. All constitutional changes can have a profound effect on decisions. But we


are not concerned about decisions alone, especially in the debate on Clause 60. We are concerned about resources. If those profound changes do not have the effect of either increasing resources or producing a system of government, administration and representation which will result in a more equitable distribution of resources or the generation of a greater growth in those resources, they must be critically viewed. That is the situation that faces us now.
If we have less resources, or less resources in real terms, the interesting game of open debate is not really worthwhile. The invitation that we offer by this pattern of devolution is that we shall have less resources to spend because of natural reaction. The hon. Member for Merioneth is well acquainted with the debates in the House on the rate support grant. He is well acquainted with the way in which the inner city areas in recent years have asserted their interests. He is therefore well acquainted with the fact that a type of quasi-nationalism is now rearing its head, not in this case in defence of an ancient culture, with an identifiable geographical area or with any of the credentials on which we have traditionally judged nationalism, but on the areas of particular interest—in some cases rightly and in some wrongly—where people believe that only by fiercely asserting the interests of the distressed areas can they acquire the resources that they need.
The hon. Member for Merioneth has seen the reaction in practice. Can he really imagine that, when the demarcation is more clearly marked, that reaction will not be more widespread and more justifiable than it is now? Of course he cannot. It is no good having decentralisation with its profound effect if the profound effect results in reduced resources for us to use in Wales to the advantage of our people.
This afternoon I have had difficulty in deciding, in the context of this clause, what will be the role of the Secretary of State. I have had to refer continually to the hon. Member for Merioneth because he has made the only substantial pro-devolutionary contribution to the debate. Since this is a House of Commons debating Chamber we should try to answer

each other's arguments. That is why I am making such extensive reference to what the hon. Member has said.
He gave the impression at one stage that the Secretary of State for Wales would be entering the Cabinet to make claims on behalf of the Assembly, or at least on behalf of Wales, using the demands that the Assembly had presented to him. The hon. Member subsequently denied that he meant that he was to be a delegate in any form.
In the context of the Bill and from what the hon. Member then said, I had the impression that everyone would go through this lovely democratic exercise of the Assembly deciding how much it wanted, what figures it would like and then have a chat with the Secretary of State for Wales who might require them to talk to the local authorities, as he saw fit. I got the impression that after this lovely three-cornered conversation around the coffee table, or possibly in a bar somewhere in Cardiff or in the openness of the debating chamber in the Corn Exchange in Cardiff, up would come the Secretary of State, girded with the strength of the Assembly and slap down his demands on the Cabinet table. We can understand the responses that he might receive from some of his Cabinet colleagues.
In that event, what does the Secretary of State do with his rate support grant bid? Does he enter a process of further negotiation, as the associations of local authorities, county and municipal, do now? On the other hand, because he is a member of the Cabinet, of the Government and of the House of Commons, with a prime duty to represent the interests of the Government—that is why he is an executive officer of the Government—does he say to the Prime Minister "Prime Minister, if I do not get either what the Assembly has asked me to get it, or something pretty near it, I shall have to resign"?
On the other hand, as a career politician, as happens more frequently, unfortunately, in conformity with the general history of politicians—I regret it but it is a fact of life—does the Secretary of State go to the Assembly and say "I am sorry, lads. It is not on. It cannot be done"? In this event, according to the mood and political affiliation of the Assembly


majority and that of the Secretary of State—or depending on the lack of common affiliation and the lightness or darkness of that relationship—the Assembly may say "We have to be loyal to the Government." I have heard that phrase once or twice in local government circles in Wales—not very frequently, but I have heard it, as some of my hon. Friends have, I am sure.
The Assembly might say that. On the other hand, it might say "It is a Tory Government, so we do not have to be loyal to the Government. This satrap of a Secretary of State comes here dictating to us from Downing Street or Whitehall, and we do not accept it."
Equally, the Assembly might say, "If that is how inadequate you represent our interests in the Cabinet, there is no benefit whatever for us in being integrated." Devolution and its frustrations make nationalists of us all. I realise that that is one of the events which the hon. Member for Merioneth would like to happen.
However, whatever the outcome, the Secretary of State becomes either a delegate—successful or unsuccessful—or a gauleiter. He must either faithfully represent the orders put to him by the Assembly and try as hard as he can to push them through in the Cabinet, or he can take whatever the Prime Minister says, regardless of what the Assembly says, and say to the Welsh people and the Assembly "Lump it. Tough luck. My first responsibility is to the Government. You have made an inflated demad. I cannot allow myself to press it. My Cabinet colleagues will not accept it. Consequently, the total rate support grant allocation made to you is 60 per cent. of what you actually deminded."
If that is a formula for unity, for the continuity of the integrity of the United Kingdom—a phrase which my right hon. Friends are fairly fond of using—I am amazed. If anything is likely to light the touchpayer and lead to an explosion, that is it.

Mr. D. E. Thomas: The hon. Gentleman is over-simplifying the position in respect of the Secretary of State. I want him to understand that the conflict which he is trying to dramatise is an extreme way occurs already under the present system. The Secretary of State within the Cabinet presents certain Welsh

demands and makes certain bids. All that the Bill does is to formalise the position, make it more identifiable and more democratic. Will not the hon. Gentleman understand that?

The First Deputy Chairman: I apologise for intervening, but I recall that the hon. Gentleman gave great comfort to the Chair when he began his speech by saying that he would be brief. I remind him that the debate has to finish at 11 o'clock.

Mr. Kinnock: I am grateful for that reminder, Sir Myer. I am surprised that the hon. Gentleman should accuse me of simplicity in a tone of criticism, because he went on ridiculously to over-simplify the current situation and the situation proposed under the Bill as well. Certainly, Secretaries of State in a Labour Government earnestly try to assert Welsh interests in the Cabinet. That is what they are there for, and in some respects, within the realms of harsh reality, that is what they succeed in doing. But when they do not succeed in doing it, that is not a major misfortune. It is something to be postponed for later representation, for an argument to be rephrased, for a set of figures to be redrawn, for another opportunity to be awaited. The most that has to happen is the regretful announcement of the Secretary of State and the reluctant understanding and acceptance of those whom he represents.
But that is not the situation which confronts us when the Secretary of State has to say publicly to the national Assembly of Wales "Tough luck", because even if he has tried as earnestly and zealously as possible to present its interests in the Cabinet, he will never get credit for it. The disappointed Assembly will in any case accuse him of not trying—and especially so if the Assembly majority is of a different political colour from the Secretary of State. I hope that the hon. Gentleman is now beginning to understand the difficulties that we can get into as a consequence.
I want to try to conclude by turning first to the question of the Consolidated Fund, the block grant and the rate support grant part of that. To some extent—I think to a great extent—the idea that this is devolution is totally counterfeit. We are talking about sums that are earmarked, sums that are allocated, sums


that must be spent in a country that is desperately short of financial resources. The idea that there will be any flexibility in the Welsh Assembly enabling the hypothecation of resources from one area to another, enabling the transfer of positions from one part to another, enabling projects to be cancelled so that others can be encouraged, is absolute rot.
We are not talking about a country in which there is time to wait for the resolution of our problems, or in which there is surplus capacity or there are surplus resources that we can dedicate to luxurious enterprises. We are talking about a country that does not have a cent to bless itself with and has no spare capacity or spare resources, that needs every ha'penny it can get and cannot afford to lose money from one public expenditure sector into another sector. If it cannot juggle the finances in that fashion to the advantage of the people, the whole exercise is a total waste of time and money and a complete fraud.
I come finally to the fraud again repeated in the phrase from the clause that
Grants for any financial year beginning after the coming into force of this section &to local authorities in Wales shall be made by the Assembly out of the Welsh Consolidated Fund instead of by the Secretary of State out of moneys provided by Parliament.
Superficially, that looks grand. But the fact is that under previous clauses it is Parliament which must give consent for this money, it is Parliament which decides the colour of the Government, Parliament which decides the public expenditure of the Government.
The idea that somehow the Welsh Assembly is generating its own funds and then on the basis of novel democratic priorities making those funds available to the people of Wales in a new way is a nonsense. What is happening is that a centralised Government are allocating a titbit for the purpose of trying to slake nationalist thirsts, trying to get themselves off a difficult hook, and calling it devolution.
I can find intellectual and constitutional reasons for disagreeing with the Bill, but my most profound reason for disagreeing with it, as I come from a constituency with a significant dependence upon the rate support grant, is that it will be of

immense material disadvantage, and consequently social and cultural disadvantage, to the people I represent. I hope that, like me, they will be doing everything possible to throw out the Bill and every proposition in it.

Mr. Wyn Roberts: It is fairly clear that the hon. Member for Bedwellty (Mr. Kinnock) prefers the evils he knows and would certainly rather not flee to the evils prognosticated in the Bill. The possibilities for wrong and the possibilities of the people of Wales suffering have never been far below the surface of this debate and our other debates.
Perhaps the first thing that I should do is to apologise to the Committee for an absence of about 20 minutes at the start of the debate. I do not think that I need apologise too profusely, because the Secretary of State for Wales has not been here at all. I understand that he is paired, but he has certainly not been here.
The effect of the clause is clear. As the hon. Gentleman said towards the end of his speech, it seeks to change the present position whereby local government grants are available through the Secretary of State out of moneys provided by Parliament and to ensure that such grants come through the Assembly out of the Welsh Consolidated Fund. The Government's proposal involves a major change not only in the position of the local authorities, which have been vociferous in their questioning of how the new system is going to work; Members of this House are clearly affected. So, too, is the Secretary of State, as we have heard from various hon. Members.
9.30 p.m.
Welsh Members will no longer be able to debate the rate support grant annually as in the past. I have contributed to those debates. We might try to take part in the debate on the rate support grant for England, but I cannot imagine that our participation will be very welcome to English Members. So there is a blow to this House in Clause 60—a very severe blow to the solar plexus—because it is almost inconceivable that we should not be able to discuss in this House some 72 per cent. of the contribution to the Welsh rate and rate support grant-borne expenditure. In 1976–77, for example, some £463 million of taxpayers' money was spent in Wales. What exactly do the Government propose?

Mr. Cledwyn Hughes: The hon. Gentleman is making a serious point, but will he explain under what rule we are prevented from debating the block grant in the House at that time? It will be a new situation, but it will concern a sum of money allocated by a vote by this House and there is no reason why it should not be debated.

Mr. Roberts: I am coming to precisely that point. Do the Goverment propose that we should discuss the grant for Wales along with the rest of the block grant, of which it is, of course, only a part? Is that what the Government have in mind for us? It is not clear from anything said so far. I would have thought that the matter of the rate support grant and how it is to be dealt with in the House would have been thought out by the Government. We must have some substitute for our participation, as Welsh Members, in the annual rate support grant debate. I do not think that to debate the grant simply as part of our debate on the block grant will be sufficient.
Then there is the matter of the negotiation of the grant with the Treasury. The implication of Clause 60—it is only an implication—is that the grant is to be negotiated with the central Government by the Assembly after consultation with the local authorities—although, I hasten to add, the position is by no means clear.
The Association of County Councils is not clear what precisely is meant by this clause and what sort of consultation will be necessary. I shall not read out the submission of the association to us, but it is clear that it does not understand the implications of the clause and the degree of consultation that there will be with local authorities and their associations. The Minister must clarify the point. We have heard in an intervention that the local authorities are to be consulted on the distribution of the grant but we have had no assurance that they will be consulted on the amount that they actually need and that has to be applied for to the central Government.
As many hon. Members have said, the Secretary of State has a very confusing role. On the one hand, I assume that he is to be consulted by the Assembly on the reserved matters listed in Schedule 5, after he has himself consulted the local authority associations. On the other

hand, he is presumably to direct or guide the Assembly's negotiations with central Government. This is the answer to the question of the hon. Member for Bedwellty whether the right hon. Gentleman will be a delegate or a gauleiter in this connection. What will the Secretary of State do? It is as clear as mud in the Bill.
How will the Secretary of State be held responsible to this House? He appears to be moving out of our reach, as he has already taken care to be out of reach of the Assembly. He is becoming a law unto himself, a remote and distant figure, a moving target ducking and weaving behind a shield inscribed with the words: "The buck does not stop here."
Then there are the problematic roles of the Assembly and the local authority associations in Wales on rate support grant and the difficulty of the negotiation mechanism.

Mr. Ioan Evans: There seems to be a presumption throughout this debate that we shall still have a Secretary of State for Wales. If so many of the powers now exercised by him and hon. Members are to be given to the Welsh Assembly, might not a future Government ask whether a Secretary of State is needed?

Mr. Roberts: The Secretary of State appears in the Bill; he has safeguarded himself. But his role in many clauses is by no means clear. It is certainly not clear what his role will be in connection with the rate support grant.
One thing seems clear; the Welsh local authority associations will no longer be able to sit beside their English counterparts to hammer out the case to put to central Government. The Welsh Counties Committee and the Association of District Councils in Wales will be silenced in this respect. I think that, to date, they have been represented in the negotiations. Is the Assembly to take their place at the negotiating table? How will the rate support grant for Wales be worked out in the first place?
As we heard yesterday, our needs are not the same as England's. We have special factors. The Government should say clearly by whom, how and when the grant for Wales will be settled. We know that it will be part of the block grant, but that confuses the issue, because we also understand that the block grant


is to be negotiated every four years, while the rate support grant is negotiated annually.
We know that if the clause is accepted and the Bill becomes an Act, the distribution of grant will be done by the Assembly. As I have already pointed out, the Minister intervened to say that local authorities will be consulted on the distribution.
Let me put another question to the Minister. Is the allocation to the Secretary of State to perform his reserved functions part of the distribution? Is he to get this money from the Assembly? is he to draw it from the Welsh Consolidated Fund? Where is he to get his money? It does not appear that the Government anticipate a problem in that area, but they may yet be surprised, as the local authorities may be surprised, by the eventual distribution made to them individually, whatever may have been claimed on their behalf in the block grant negotiations.
There is nothing in the Bill to prevent the Assembly changing its priorities and holding back rate support grant, which could force local authorities to raise their rates more than they would otherwise have done. It looks as if they will be encouraged to do so by the various White Papers published by the Government. Indeed, this position was envisaged in "Our Changing Democracy", Command 6348, where paragraph 228 states:
The Assembly will decide both how much of the block grant should be distributed to local government and how to allocate it among individual authorities. In cauculating the block grant the Government will in general assume that Welsh local authorities will receive, in relation to their expenditure needs and their taxable resources, provision comparable with that for local authorities in England; whether they in fact levy more or less local tax, and are assigned more or less subsidy from the block grant, will be at matter to be settled in Wales.
Paragraph 229 states:
The Assembly will have an optional power to make a surcharge on local authority taxation; but it will not have to use this unless it runs into deficit or deliberately aims for a higher level of expenditure, for example to meet some particular Welsh priority for which it judges people would be willing to accept higher burdens.
During the debate on the Scotland Bill, the position was made absolutely clear when my lion. Friend the Member for Ayr (Mr. Younger) said that the Scottish Assembly

will be able to spend more than is expected on one part of its functions and make up the shortfall by forcing local authorities to raise rents at a higher level.
The Secretary of State for Scotland replied:
This fact has been clear all along. If he is only now appreciating it, that is too bad. This matter has nothing to do with the Government. The negotiations on the rate support grant, and therefore the ultimate impact on ratepayers, will pass to the Scottish Executive."—[Official Report, 24th January 1978; Vol. 942, c. 1301–2.]
If we have an unequivocal statement from the Government that a similar position will occur in Wales, the implications are very serious. One is that the Government have not abandoned the idea of giving the Assembly powers of taxation. The Assembly can clearly raise extra money through the local authorities by depriving them of rate support grant and thus forcing them to raise their rates. This is made clear in paragraph 34 of the White Paper of August 1976, Cmnd. 6585, which says:
If future changes are made in the taxation framework, particularly for financing local government, which would make it feasible for the Welsh Assembly to supplement the block fund while still meeting the conditions set out in paragraph 108 of Cmnd. 6348, the Government will be ready to consider incorporating the necessary revenue-raising powers in subsequent legislation.
The conclusion of paragraph 108 of Cmnd. 6348 was that
the only tax power suitable for devolution is a general power to levy a surcharge on local authority taxation.
What do we call raising the rates except a form of surcharge? That seems to me to be quite clearly on the cards for Wales.
9.45 p.m.
On the question of the Assembly's withholding rate support grant—this is envisaged as a possibility—it is surely absolutely wrong that money claimed from the Exchequer for a specific purpose should then be withheld and applied to a totally different purpose. That is not good financial administration; it is wholly bad and unjustifiable on any and every ground.
I cannot find words strong enough to condemn the practice which the Government are about to introduce. It raises deception to an officially approved level. There is an element of deceit, surely, when


the taxpayers' money is claimed for one purpose and then deliberately applied to another purpose?

Mr. Alec Jones: The hon. Gentleman used the word "deceit". I understand that this may be somewhat difficult to understand, but that is exactly the situation that exists now. When the rate support grant settlement is made—once the money has been passed on to the individual local authorities—those indivdual local authorities are perfectly entitled to use taxpayers' money that was earmarked for a social service for roads instead. That has been one of the main criticisms. But this is not something new, nor is it a consequence of this Bill. It is inbuilt in the present system.

Mr. Roberts: I would have thought that there was a considerable difference in this case, namely, that the money will have been claimed in the negotiation of the block grant on behalf of the local authorities. It is now proposed that the money should not be spent necessarily by the local authorities for those purposes but for a totally different purpose altogether.

Mr. Hooson: The hon. Gentleman has used strong words about people who use money that has been raised for one purpose but is used for another. What would he say about successive Conservative Governments and the way they used the Road Fund in this country?

Mr. Roberts: I have taken some time—rather more time than I thought—and I could not possibly go after that hare from Powys. I find the proposal that the Assembly can decide how much of the block grant should be distributed to local government—and how to allocate it among individual authorities—very dubious indeed. How are we to ensure that those areas that have most Members in the Assembly do not grab an unfair share of the available resources? Under the present system we know precisely how the authorities are compensated by the various elements of the rate support grant which plays such a vital role in the provision of local services.
I might tell the hon. and learned Member for Montgomery (Mr. Hooson) that, of course, his county of Powys is supported

to the tune of 85 per cent. by rate support grant. The average for Wales is about 72 per cent. Is that fair system to be thrown to the four winds? What, indeed, is to replace it?
It is somewhat undignified to ask for more in the country's present economic position, although the Government are always implying that we in Wales shall somehow get more, and be better off, under devolution. But it is not undignified to try to ensure that we do not get less than our past fair share. When the system is changed that is always a possibility. The Minister has a great deal to explain about Clause 60. He must give us a great deal of clarification.

Mr. Alec Jones: I shall do my best to take up all the points that have been made in the debate. Unfortunately this means that I shall speak for longer than I would have otherwise wished, but since I have sat here almost silent for many hours I am sure that hon. Members will forgive me for that.
I was surprised that several of the contributions seemed to put forward the idea that the present system is almost satisfactory. The hon. Member for Barry (Sir R. Gower) said that it was an objective and scientific system. But that is not what local authorities tell me, whether they are county or district councils. In fact, that is not what hon. Members of this House have said in the past. For my sins I have taken part in the last two debates on the rate support grant orders and I do not recall anyone extolling the virtues of the present system. It was judged to be unfair, and this is what local authorities in Wales are saying.
Welsh local authorities told me in no uncertain terms that the recent rate support grant settlement was far too generous to London and they claim that the Department of the Environment is too London-oriented. They were not satisfied and they do not think that Wales has had its fair share. They felt that insufficient regard had been paid to the needs of Wales.
My hon. Friend the Member for Aberdare (Mr. Evans) and the hon. Member for Pembroke (Mr. Edwards) talked about local authorities having less say in the rate support grant settlement. In fact my hon. Friend the Member for Aberdare used the words "losing this sort of direct


contact". I put it to him that it is somewhat stretching the imagination to believe that there is direct contact between individual local authorities in Wales and the body that made the rate support grant settlement in this country. That is not how the system works.
It seems that under the present system Welsh local authorities are small fish in a big pond. At least when the Assembly is established they will be relatively bigger fish in a relatively smaller pond.

Mr. Ioan Evans: I thank the Minister for giving way so early in his speech. I was quoting, and I think that the hon. Member for Pembroke (Mr. Edwards) was as well, what the county councils are saying. There is considerable concern, because they believe that under the Wales Bill's provisions local authorities will have far less say and influence over the total grant to local government in Wales. They feel that they will have less influence over the manner in which the grant is allocated, and that is why they are expressing these fears.

Mr. Jones: I shall do my best to come to all these points. I was specifically trying to deal with and isolate the specific suggestion that Welsh local authorities somehow, under the present system, had this direct contact. In fact, the representatives of the Welsh local authority associations have a very small representation on this body. I am not objecting to that, but I do not think that hon. Members should pretend that this gives direct contact. That is just not true.

Mr. Nicholas Edwards: Nevertheless, the Association of County Councils considers it important and worth fighting for. Will the Minister explain how the new arrangements would strengthen Welsh involvement in the actual negotiation of the total rate support grant and the amount that comes to Wales? All he has mentioned is their part in the distribution to counties, but what matters is the total that comes to Wales. How does this make the authorities bigger fish in the negotiations?

Mr. Jones: The hon. Gentleman must be more patient. I had not come to my peroration, but was indulging only in a warming up exercise. I shall try to deal with the problem.
We must also bear in mind the fact that many county councils, and indeed their association, are bitterly opposed to the principle of devolution. In other words, if the matter is in the blood, it is also in the head and heart. I am not trying to dodge the issue, but I was trying to deal with the question whether the contact is direct. In my experience I do not believe that it is direct at all.
The hon. Member for Pembroke said that it was a great advantage that the subject of rate support grant had up to now been debated in this House. I ask the hon. Gentleman to recall how many Welsh Members were able to get in on rate support grant debates last year or the year before. The opportunity to take part in such a debate may not exist for Welsh Members, despite their desire to wish to participate, because of the time factor. But when we come to an Assembly we can be sure that there will be adequate time to discuss rate support grant by elected Welshmen who may not be Members of Parliament but who will still have the interests of Wales very much at heart.

Mr. Hooson: Since the Minister was present in the rate support grant debates this year, last year and the year before that will he say how many of the hon. Members who have made great play with the negotiations that take place on the rate deficiency fund were present for those debates or tried to get in to speak?

Mr. Jones: I shall let the hon. and learned Gentleman into a secret. I sent one of my hon. Friends to obtain that information, but unfortunately it has not been given to me in time. I do not wish to identify individuals when talking about the participation of Welsh Members in the RSG debates. Perhaps they came into the debate and, having appreciated that their chances of participating were small, may not have stayed.

Mr. Wyn Roberts: What is certain is that Welsh Members, after devolution, will not get in on discussions in respect of an English rate support grant. The other point the Minister has ignored is the fact that, whereas we in this Parliament can discuss the amount of the grant, the Assembly will not be able to do so.

Mr. Jones: I have not ignored anything yet. I have not been on my feet


for very long, I have received a number of interventions and am still undertaking my warming up exercises.
I wish to deal with one or two points made by the hon. Member for Pembroke. He referred to the block grant and mentioned the four-year aspect of the matter. I wish to say a few words on that subject because there seems to have been some confusion. Perhaps it is well at this time to try to find out how the level of public expenditure in Wales is allocated at present and how it will be allocated after devolution. The present position is that the level of public expenditure allocated in Wales is now a Government decision in which the Secretary of State for Wales—because, thanks to a Labour Government, he is inside the Cabinet—is in there fighting for his own corner. His corner is the needs of Wales.
That is the position and it will be exactly the same in the post-devolution period. The total block fund will be a Government decision and the Secretary of State for Wales will be inside the Cabinet fighting for his corner. There will be no sudden loss in relation to the block grant. Indeed, I believe that the Secretary of State will find it an advantage to have the Assembly advising him on the level of the grant.
10 p.m.
Even if the Assembly is trying to push the Secretary of Slate further than he wishes, or is able, to go, I cannot see that this could weaken his position in the negotiations. There is no basis for assuming that Wales will do less well after devolution. As long as needs are present, whether in Wales, Scotland, the North-West or the South-West, any reasonable Government will take them into account, as far as the general economy will allow. That would certainly be the position of a Labour Government.
It has been suggested that rather than having the block sum changing yearly, some local authorities would like a degree of continuity, though I understand that the hon. and learned. Member for Cleveland and Whitby (Mr. Brittan) said on the Scotland Bill that he would not find that acceptable. We say that the formula approach, which relates the total level of public expenditure on devolved services to expenditure on comparable services in

other parts of the country and maintains that defined percentage relationship for a number of years, is something which the Government would want to discuss with the Assembly.
The hon. Member for Conway (Mr. Roberts) mentioned a four-year period, but that position has not been taken up by the Government. We have merely said that this is an option open to the Government in discussing these matters with the Assembly. It is not true to say that four years has been decided upon and is now fixed. We have drafted Clause 46 in general terms so that if the formula method is acceptable to both sides, the Bill will not inhibit the adoption of that approach.
I should like to deal with the relationship between the block fund and the rate support grant. After devolution there will not be an England and Wales rate support grant negotiation. These negotiations will be separate. The Assembly will negotiate with the Secretary of State for a block fund which will include an element for the payment of rate support grant.
In negotiating that fund the Assembly will naturally take into account what Welsh local authorities have represented about their needs in exactly the same way as central Government now takes into account what local authorities represent to us as their needs. That is not to say that central Government have always accepted the views of local authorities, but at least those representations are made. The Assembly will negotiate a separate Welsh rate support grant settlement with Welsh local authorities. There is no prior England and Wales negotiations.
Welsh local authorities, therefore, will in my view be able to play a much more influential role than they can at present. We hope and believe that the machinery which we would devise would be far less complex and much easier to understand than is the present machinery. Several hon. Members have suggested that the Bill is inadequate as it would be unable to prevent the Assembly from straying, as it were, the reserved local authority services of rate support grant. I put to the Committee that this would be impossible for the Assembly to achieve in any technical sense. Apart from that—I shall give my reason for that later—I do not believe


that we should assume that an Assembly would seek to do that.
I come back to the reason for saying that it is not possible for the Assembly to do it. The level of expenditure on reserved services will be the subject of consultation between the responsible Secretary of State and Welsh local authorities. Clause 60(2) provides for this. Following this consultation, the Secretary of State will indicate to the Assembly what should be included in the total of relevant expenditure for rate support grant purposes in respect of those reserved services.
Roughly 85 per cent. of expenditure on reserved services is in respect of the police and mandatory awards to students, of which local authorities, on those two services, currently receive specific grants of 50 per cent. and 90 per cent. respectively, but it is from the responsible Departments of the United Kingdom Government. That arrangement will continue. The specific grants will continue, post-devolution. The residual element of the expenditure on reserved services—this is apart from the specific grant components—will fall to be supported by the rate support grant of the Assembly. The block fund payments to the Assembly will include provisions to enable this support to be provided for the reserved local authority services.
Hon. Members will know that the rate support grant is a block grant. No part of it can be hypothecated for any particular purposes. The central Government, for example, at present cannot say that so much of a grant is to be spent on education and so much on personal social services. Nor will the Assembly be able to hypothecate the grant between devolved and reserved services. Local authorities are free to use the grant in what ever way they wish, whatever the level at which it is set by the Assembly. That is why I said that it is impossible for the Assembly to starve the reserved services of support. Any attempt to do so could result in a cut-back in a wide variety of local authority services depending on the priorities of individual authorities and/or on the increases in local rates.
We also have to take into account that local authority ratepayers are also Assembly electors and they would soon draw their own conclusions on the matter.

Mr. Kinnock: Am I following my hon. Friend correctly? In stipulating that there can effectively be no change in reserved services, will he at least concur in the view that I earlier put forward that, however much and however openly the Assembly debates, there will be no differences resulting from the act of devolution in respect of those services?

Mr. Jones: I do not agree with my hon. Friend on that. The difference between us would be in trying to define what is meant by "no possible variation", although I realise that my hon. Friend did not use that precise phrase. We have been dealing with this issue for long enough to know that much of local authority expenditure is continuous and committed. Of course, room to manoeuvre is limited and it is not possible to switch resources to any great extent. One could not, for example, switch from education to housing to the extent that teachers would be thrown out of work and schools would have to close. There is, however, some room to manoeuvre although it is not as great as my hon. Friend would wish.
I do not dissent from his other point that the object of the exercise for Assemblymen, as for hon. Members in this House, would be to increase the total sum thereby creating even greater elbow room.
The hon. Member for Pembroke suggested that the Assembly would be able to withhold resources from local authorities which would cause the rates to rise and that this would be an indirect method of taxation. I am surprised that he saw anything startling or new in that concept. By varying the amount of rate support grant the Assembly could vary the sums that local authorities must raise through the rates. That would be nothing new. It happens now. The local authorities tell me that because the central Government have not paid them sufficient in support they have been forced to increase the rates to levels they do not like.
When the level of rate support grant has increased, local authorities have usually clapped their hands, but not too loudly. The Government have never made any secret of the fact that this effect on the rates is possible. It is one of the acceptable consequences of devolution, and with devolution it is inevitable. The


White Paper said quite clearly that devolution could lead to extra levels of rates, but we believe that any reasonable Assemblymen will take that factor into account.

Mr. Nicholas Edwards: The Minister says that the position would be the same under the Bill as it is at present. It is different. The rate support grant can be reduced below the level that the local authorities think desirable. Under the new system the block grant will be negotiated on the basis that certain rate support grant money is needed by the local authorities, and subsequently the Assembly might decide to cut the amount it pays out to the local authorities even though it has received the block grant, including that amount, from the Government.

Mr. Jones: One has to bear in mind that the Assembly will not be in a glass bottle on a shelf. It will be subject to the political pressures that are applied to us in this House every day. Since most of the Assemblymen will live in Wales, I can guarantee that as much as I can guarantee anything. The end result for the people who matter—those who will pay the bill—is that under the present system the withdrawal of central Government support means extra rates and that similarly, after devolution, withdrawal by the Assembly of funds would mean the same.
I do not see any rational grounds for supposing that the Assembly would exercise its powers contrary to the best interests of Welsh local authorities or ratepayers. I go even further and ask who is better able to show concern for Welsh local authorities and ratepayers. The the Assemblymen will live in Wales, I can who matter—those who will pay the bill—devolution, withdrawal by the Assembly be ratepayers and users of local authority services, too.
10.15 p.m.
Many references have been made to the hon. Member for Merioneth (Mr. Thomas). I welcomed his comments about the need for a more flexible Welsh rate support grant system. That is something that has been much in the mind of a joint Welsh Office-Welsh local authority working party. The party has now been working for over a year in trying to design a separate rate support grant system for Wales.
There is a large measure of dissatisfaction with the present method that is based on something mysterious called regression analysis. It seems that with the exception of a few experts—I do not class myself as one—it is almost an esoteric exercise in which certain criteria are put into the formula and we hope or pray that the results will come out as we thought. However, judging by the comments that I have heard during several years when Governments of both parties have been in power, I do not think that it is a method that has been welcomed with universal acclaim as being understandable, simple or concentrating on bringing out needs. That is why we set up the working party to try to devise a system that would be more in keeping with the needs of Wales.
We have in mind that the method of needs assessment that the working party has recommended is not based on multiple regression analysis but on a much simpler concept based on client groups. The working party has produced a report that has been considered by the Welsh Consultative Council on Local Government Finance. Conservative Members have made a great virtue of the consultative council. I thank the members of the council for the work that they have done thoughout the past two or three years.
The council has considered the report of the working party and endorsed it. Further work is now in hand. We are expecting a second report in May or June. We are taking steps so that we can take a dummy run, as it were, using the new Welsh proposals alongside the present system. That will enable us to test the efficacy of the system.
I think that I have sought to deal with most of the points that have been raised. [HON. MEMBERS: "Hear, hear."] If hon. Members think that I am talking out the debate, let me remind them that there are 42 minutes left. There are some hon. Members who must come to these debates more often. If they do so, they will have a greater appreciation of talking things out. I serve only to sit and wait, and have been waiting a long time to say these few words.
I apologise to my hon. Friend the Member for West Lothian (Mr. Dalyell) if I was rude to him earlier. I am sure


that he will understand that even Ministers are not as cool-tempered as they might wish to be or should be. My hon. Friend asked four questions. The Chairman answered one of them—namely, that my hon. Friend was not in order to discuss forestry or inland waterways in this debate. However, he asked about the cost of manpower in the rate support grant settlement. Much of the work would be done by the present staff. I am not able to give a figure because it is not possible to split the estimates of likely costings into individual transactions, especially as we are now in the process of trying to devise new means of calculating the rate support grant.
My hon. Friend asked whether there have been consultations with Welsh local authorities, to which the answer is certainly "Yes". However, if my hon. Friend thinks that consultations meant universal acclaim, the answer to that is equally "No". As far as I can see, it depends on whether one is a county or a

district man on that issue. But certainly most local authorities and the local authority associations in Wales have been fully consulted and have made quite sure that we are fully aware of their views on these matters.

My hon. Friend again raised the question of divided loyalties of the Civil Service. I do not wish to pursue that point, but I invite my hon. Friends to read the speech made by my right hon. Friend the Secretary of State for Wales when he dealt with this subject in full, and with the costs and the part-time aspect and the salaries, in a previous debate. However, I understand my hon. Friend's view. It is not a view that I share. I do not believe that his is a view that is shared by the Civil Service unions.

I hope, therefore, that the clause will be allowed to stand part of the Bill.

Question put, That the clause, as amended, stand part of the Bill:—

The Committee divided: Ayes 128, Noes 112.

Division No. 163]
AYES
[10.21 p.m


Allaun, Frank
Graham, Ted
Richardson, Miss Jo


Atkins, Ronald (Preston N)
Grant, George (Morpeth)
Roberts, Albert (Normanton)


Atkinson, Norman
Grant, John (Islington C)
Robinson, Geoffrey


Barnett, Guy (Greenwich)
Harper, Joseph
Roderick, Caerwyn


Bates, Alf
Harrison, Rt Hon Walter
Rodgers, George (Chorley)


Beith, A. J.
Hooson, Emlyn
Rodgers, Rt Hon William (Stockton)


Bidwell, Sydney
Howells, Geraint (Cardigan)
Ross, Stephen (Isle of Wight)


Blenkinsop, Arthur
Huckfield, Les
Ross, Rt Hon W. (Kilmarnock)


Booth, Rt Hon Albert
Hughes, Rt Hon C. (Anglesey)
Rowlands, Ted


Cant, R. B.
Hughes, Roy (Newport)
Shaw, Arnold (Ilford South)


Clemitson, Ivor
Hunter, Adam
Silkin, Rt Hon S. C. (Dulwich)


Cocks, Rt Hon Michael (Bristol S)
Jackson, Miss Margaret (Lincoln)
Skinner, Dennis


Cohen, Stanley
John, Brynmor
Smith, Cyril (Rochdale)


Coleman, Donald
Johnson, James (Hull West)
Smith, John (N Lanarkshire)


Cowans, Harry
Johnson, Walter (Derby S)
Snape, Peter


Cox, Thomas (Tooting)
Jones, Alec (Rhondda)
Spriggs, Leslie


Crawshaw, Richard
Jones, Dan (Burnley)
Stallard, A. W.


Crowther, Stan (Rotherham)
Judd, Frank
Steel, Rt Hon David


Cryer, Bob
Lamble, David
Stewart, Rt Hon Donald


Davidson, Arthur
Lamborn, Harry
Stewart, Rt Hon M. (Fulham)


Davies, Bryan (Enfield N)
Lamond, James
Stoddart, David


Deakins, Eric
Litterick, Tom
Stott, Roger


Dean, Joseph (Leeds West)
Luard, Evan
Summerskill, Hon Dr Shirley


Doig, Peter
MacFarquhar, Roderick
Taylor, Mrs Ann (Boiton W)


Dormand, J. D.
McNamara, Kevin
Thomas, Dafydd (Merioneth)


Douglas-Mann, Bruce
Mallalieu, J. P. W.
Thomas, Mike (Newcastle E)


Duffy, A. E. P.
Marshall, Dr Edmund (Goole)
Thomas, Ron (Bristol NW)


Dunnett, Jack
Marshall, Jim (Leicester S)
Thompson, George


Ellis, John (Brigg &amp; Scun)
Mikardo, Ian
Torney, Tom


English, Michael
Millan, Rt Hon Bruce
Tuck, Raphael


Evans, Gwynfor (Carmarthen)
Miller, Dr M. S. (E Kilbride)
Varley, Rt Hon Eric G.


Evans, John (Newton)
Molloy, William
Wainwright, Edwin (Dearne V)


Ewing, Harry (Stirling)
Moonman, Eric
Walker, Harold (Doncaster)


Fernyhough, Rt Hon E.
Morris, Rt Hon Charles R.
Watkins, David


Flannery, Martin
Mulley, Rt Hon Frederick
Wellbeloved, James


Fletcher, Ted (Darlington)
Murray, Rt Hon Ronald King
Whitlock, William


Foot, Rt Hon Michael
Newens, Stanley
Wigley, Dafydd


Forrester, John
Orme, Rt Hon Stanley
Wilson, Gordon (Dundee E)


Fraser, John (Lambeth, N'w'd)
Palmer, Arthur
Wise, Mrs Audrey


Freeson, Rt Hon Reginald
Park, George
Woof, Robert


George, Bruce
Pavitt, Laurie



Goldlng, John
Pendry, Tom
TELLERS FOR THE AYES:


Gould, Bryan
Penhaligon, David
Mr. Frank R. White and


Gourlay, Harry
Reid, George
Mr. James Tinn.




NOES


Arnold, Tom
Hamilton, Michael (Salisbury)
Powell, Rt Hon J. Enoch


Atkins, Rt Hon H. (Spelthorne)
Hampson, Dr Keith
Prentice, Rt Hon Reg


Atkinson, David (Bournemouth, East)
Harrison, Col Sir Harwood (Eye)
Pym, Rt Hon Francis


Bendall, Vivian (Ilford North)
Hayhoe, Barney
Renton, Tim (Mid-Sussex)


Benyon, W.
Hodgson, Robin
Rhodes, James R.


Biggs-Davison, John
Holland, Philip
Ridley, Hon Nicholas


Boscawen, Hon Robert
Hordern, Peter
Roberts, Michael (Cardiff NW)


Bottomley, Peter
Hurd, Douglas
Roberts, Wyn (Conway)


Brittan, Leon
James, David
Ross, William (Londonderry)


Brocklebank-Fowler, C.
Jessel, Toby
Rost, Peter (SE Derbyshire)


Brooke, Peter
Johnson Smith, G. (E Grinstead)
Shaw, Giles (Pudsey)


Brotherton, Michael
Jopling, Michael
Shelton, William (Streatham)


Buchanan-Smith, Alick
Kaberry, Sir Donald
Shepherd, Colin


Budgen, Nick
King, Tom (Bridgwater)
Shersby, Michael


Burden, F. A.
Kinnock, Neil
Sims, Roger


Butler, Adam (Bosworth)
Knox, David
Skeet, T. H. H.


Chalker, Mrs Lynda
Lamont, Norman
Smith, Dudley (Warwick)


Clarke, Kenneth (Rushcliffe)
Lloyd, Ian
Smith, Timothy John (Ashfield)


Costain, A. P.
Luce, Richard
Speed, Keith


Dean, Paul (N Somerset)
McCrindle, Robert
Spence, John


Douglas-Hamilton, Lord James
McCusker, H.
Stanbrook, Ivor


Drayson, Burnaby
Macfarlane, Neil
Stanley, John


Dunlop, John
McNair-Wilson, M. (Newbury)
Stradling Thomas, J.


Dykes, Hugh
McNair-Wilson, p. (New Forest)
Tebbitt, Norman


Eden, Rt Hon Sir John
Mather, Carol
Temple Morris, Peter


Edwards, Nicholas (Pembroke)
Mawby, Ray
Thatcher, Rt Hon Margaret


Elliott, Sir William
Maxwell-Hyslop, Robin
Trotter, Neville


Emery, Peter
Meyer, Sir Anthony
van Straubenzee, W. R.


Evans, Ioan (Aberdare)
Mitchell, David (Baslngstoke)
Vaughan, Dr Gerald


Eyre, Reginald
Montgomery, Fergus
Viggers, Peter


Farr, John
Moore, John (Croydon C)
Walker, Rt Hon P. (Worcester)


Fell, Anthony
Morrison, Hon Peter (Chester)
Warren, Kenneth


Fletcher, Alex (Edinburgh N)
Nelson, Anthony
Weatherill, Bernard


Fowler, Norman (Sutton C'f'd)
Neubert, Michael
Young, Sir G. (Ealing, Acton)


Gardiner, George (Reigate)
Page, John (Harrow West)



Gardner, Edward (S Fylde)
Page, Rt Hon R. Graham (Crosby)
TELLERS FOR THE NOES:


Gow, Ian (Eastbourne)
Page, Richard (Workington)
Mr. John MacGregor and


Gower, Sir Raymond (Barry)
Parkinson, Cecil
Mr. Spencer Le Marchant.


Grist, Ian
Percival, Ian

Question accordingly agreed to.


Clause 60, as amended, ordered to stand part of the Bill.

Clause 61

POWER TO MAKE NEW PROVISION AS TO CERTAIN BODIES

Mr. Brittan: I beg to move Amendment No. 293, in page 24, leave out lines 8 to 10.
In coming to Clause 61, I suggest that we are at what might be described as, to borrow the phraseology of the hon. Member for West Lothian (Mr. Dalyell), a classic example of a manhole clause, by which, of course, as those who have been present at all our devolution debates will realise, I mean a clause which, on the face of it, seems either completely innocent or so technical as to be incomprehensible but which, when one lifts the manhole cover, proves to disclose principles of considerable importance which, on analysis and examination, prove to be considerably objectionable.
The clause allows a Minister of the Crown to confer on the Assembly powers in relation to certain bodies listed in Schedule 7 which at the moment are exercised in relation to such bodies by a Minister of the Crown. In Schedule 7 one sees listed in Part I the bodies with which I am principally concerned in this amendment. They are bodies of considerable importance and powers at present. They are the British Waterways Board, the Forestry Commissioners, the Housing Corporation, the Inland Waterways Amenity Advisory Council, the Severn-Trent Water Authority and the Welsh National Water Development Authority. Alongside these bodies is a reference to the constituting enactments—that is to say, the enactments which set them up.
Under Clause 61, in relation to these bodies in Schedule 7, including not only the ones I have referred to but the much longer list, which I do not propose to read out, to be found in Part II, a Minister of the Crown may make one of a series of provisions by order which would be subject, as the clause stands, only to annulment, in pursuance of a resolution of either House of Parliament; such an order would not require an affirmative resolution.
The provisions that a Minister of the Crown may make in relation to those

bodies are set out in subsection (3). Among the things that a Minister can do in relation to those bodies is to make provisions to enable
powers to be exercised or requiring duties to be performed by the Assembly instead of by a Minister of the Crown, or by the one or by the other, or by the Assembly with the consent of a Minister of the Crown.
What that means, as I understand it, is that, where at present a Minister of the Crown has powers in relation to such bodies as the Forestry Commissioners, the clause permits a Minister of the Crown by order to enable those powers to be exercised either by the Assembly instead of by the Minister, by the Assembly as well as by the Minister, or by the Assembly with the consent of the Minister.
It really means that, by an order subject only to the negative resolution procedure, considerable further powers may be conferred on the Welsh Assembly in relation to the statutory regulations and control at present exercised by Ministers of the Crown over the various bodies specified in Schedule 7.
The first curious point in relation to this power, which does not arise directly in the amendment but which nevertheless is part of the clause and is, therefore, wholly relevant to the amendment, is that nothing in Clause 61 restricts the transfer of the powers at present exercised by a Minister to powers exercised in relation to the operations of those bodies in Wales. Thus, for example, it would be possible for a Minister to make an order transferring to the Assembly the exercise of powers operated at the moment by a Minister in relation to the Forestry Commissioners, in such a way that the Assembly could exercise powers over forests outside Wales.
Similarly, in the case of the British Waterways Board, a body which operates well beyond the confines of the Principality, there is nothing in Clause 61 to prevent the Minister from changing the arrangements so that the powers at the moment exercised by the same Minister or a different one would be exercisable by the Assembly, irrespective of whether those powers related to what was happening in Wales.
The only protection against an order conferring jurisdiction on the Assembly well beyond the confines of Wales is the very limited and illusory protection of a negative resolution being passed by either House of Parliament. Unhappily, that aspect of the clause to which the amendment relates is even more serious than the aspect of the Bill to which I have already referred. That is the provision in subsection (2), which the amendment would totally delete.

Sir Anthony Meyer: When my hon. and learned Friend referred to public bodies under Part of Schedule 7, did he intend to deal also with the particular problems raised by the two water authorities which span the borders of Wales? Substantial areas of England are affected by the operations of the Welsh National Water Development Authority. This is an intensely sensitive area on both sides of the border. There will be considerable apprehensions in Wales and the border areas of England if it thought that the clause, and particularly this subsection, will further upset the delicate balance of forces which at the moment is operating tolerably despite grumbles on both sides.

Mr. Brittan: There is no question but that that is possible if the clause becomes law. Unhappily, I can give very little comfort to my hon. Friend. If the amendment is passed, and even if the whole clause is deleted, there are plenty of other clauses—if the guillotine operates as it has already done, we shall not be able to debate them—which will disturb that balance in ways even more serious than this clause would do.
Subsection (2) relates only to the public bodies referred to in Part I of Schedule 7. It says that, in relation to those bodies,
a Minister of the Crown may by order modify or exclude any provision of this Act.
Let us first note that that order, just as in the case of the other orders to which I have referred, is one which has effect unless it is annulled by resolution of either House of Parliament. Let it also be noted that the effect of that provision is a very considerable one.
10.45 p.m.
The drafting behind the clause is extremely loose but I have no doubt that the idea behind it is that a Minister of

the Crown should be able to say, in relation to the bodies concerned, that, although orders may be made transferring to the Assembly powers in relation to such bodies, the provisions affecting the Assembly shall not apply and the Assembly shall not have power. Alternatively, no doubt, it will be argued that, if it is desired to transfer powers to the Assembly, the Minister may be able to do so in a reduced form in regard to these bodies in one way or another.
Unfortunately, what is objectionable is that the subsection as it is worded would enable a Minister of the Crown, without any legislation being passed to alter the present law in such a way that the Welsh Assembly was granted the powers at present exercised by a Minister in respect of these bodies but also granted greater powers in respect of those bodies than the Welsh Assembly generally has in relation to other related matters.
Let us take, for example, the Forestry Commissioners. Suppose that the Minister makes an order transferring to the Assembly the powers exercised by a Minister in respect of the Forestry Commission, or, at least, in respect of the Forestry Commission's operations in Wales. What then happens? In Schedule 2, Part X, on page 54 of the Bill, under "Forestry"—these are the powers conferred on the Welsh Assembly—we find the Forestry Act 1967 specified, and the excluded functions are then set out. In other words, the Assembly has the powers granted except for the excluded functions, and those are clearly set out. It will be observed that the excluded powers are only a small proportion of the totality of the Act. I do not know how many sections there are in that Act, but it is plain that only a limited number of powers are excluded. For the cost part, the Forestry Act 1967 is devolved.
If the powers in relation to the Forestry Commissioners are also transferred in regard to Wales by an order under Clause 61, the Minister may, in respect of that transfer,
modify or exclude any provision of this Act
Concentrating on the word "modify", what that means, as it applies to the words
any provision of this Act".
is that it includes the provisions of Schedule 2, Part X, in relation to forestry.


Therefore the Minister, by an order of this kind, can modify the excluded functions, reducing the excluded functions, thereby, by a simple order, subject to a negative resolution, increasing substantially the powers of the Assembly.
In that event, the House of Commons will have passed a Bill conferring powers on the Assembly in relation to the Forestry Act in a limited sense, because the powers set out in the right-hand column on page 54 of the Bill will have been excluded. By a stroke of the ministerial pen, the Minister will then transfer powers in relation to the Forestry Commissioners by means of an order under Clause 61, and he will also, by a similar order, modify any provision of the Act which he wishes to modify. He can modify the provisions of Part X of Schedule 2 so as to remove some of the excluded functions and thereby increase the powers of the Assembly.
Similarly, immediately following Part X there is conveniently placed "Water and Land Drainage", to which reference has been made. The Committee will see that the public bodies include the Inland Waterways Amenity Advisory Council, the Seven-Trent Water Authority and the Welsh National Water Development Authority.
If one looks at the provisions of Schedule 2, Part XI, one sees that certain Acts, particularly the Water Act 1973, are devolved to the Welsh Assembly. But substantial powers and functions are excluded because they appear in the right-hand column.
Under Clause 61, however, the Minister may exercise his power virtually unfettered. He may by order transfer the Westminster Government's powers with regard to these water bodies—if one may so call them—to the Welsh Assembly and at the same time modify the provisions of Schedule 2, Part XI, in such a way as to reduce the excluded functions and increase the included functions, thereby substantially increasing the powers of the Assembly

Mr. Dalyell: In order to save my making a speech, may I ask two questions of the Minister and of the Opposition Front Bench? What does one say to

people like Mr. Frank Price, of the British Inland Waterways Board—

Mr. John Smith: "Hello."

Mr. Dalyell: —when he says that decision-making on the British Waterways Board by these devolved Assemblies is made far more difficult? The same applies to the Forestry Commission and the actual decision-making in the strategy for forestry in Britain.

Mr. Brittan: One says to him, as one does to forestry people as well, that he is right but that he does not perhaps quite realise just how right he is.
In the representations that I have had from forestry and water interests, all the concentration is on the clauses in the Bill which specifically relate to forestry and water. I myself have not so far had representations which take on board the fact that by this innocent-looking provision in Clause 61(2), under the manhole, so to speak, it is possible for the Minister greatly to extend the powers of the Welsh Assembly in relation to water and forestry—and a whole host of other matters—at the stroke of a pen. It lies innocently latent as a possibility for a Minister to increase the powers of the Assembly.
Therefore, if the people who have made representations about the effects of the Bill on water and forestry matters looked not only at the provisions specifically relating to those matters but also at the potential of Clause 61(2), I think that their representations would be even more vehement and their concern would be even greater about the potential of the Bill.
Later in the amendments relating to Clause 61 there comes an amendment which seeks to alter the basis on which the Statutory Instrument is made. But that would remedy the mischief only in part, which is why we are also putting forward this more far-reaching amendment. The right course is not that the Minister should have to come to the House of Commons to seek to extend his powers under the Bill but that he should not have the power to do that at all. The Bill should state clearly now to what extent powers are to be devolved rather than afford latent powers which lurk under innocent-sounding phrases of provisions appearing towards the end of the


Bill, when, no doubt, the Government hope that the Opposition's guard will be lowered.
It is precisely because of the potential of Clause 61 in general and subsection (2) in particular that I move this amendment.

Sir A. Meyer: I confess that there were times when the exposition of my hon. and learned Friend the Member for Cleveland and Whitby (Mr. Brittan) had me floundering, and I suspect that the Minister of State was the only person who fully followed his immensely complex argument. I was absolutely fascinated by it, but I am bound to say that I do not take the same view myself.
On the whole, I am somewhat relieved by the powers that the Minister proposes to retain. I am a little suspicious of the word "modify", but I am a trusting chap and am perfectly prepared to accept an assurance from the Minister of State that "modify" excludes "extend".
The matters covered by Part I of Schedule 7 are rather peculiarly sensitive, and I believe that it would not be wise to allow the Assembly to extend its activities here. These are matters—particularly in relation to the two water authorities and the British Waterways Board, and the Inland Waterways Amenity Advisory Council—which touch on relations between England and Wales.
It is easy, when debating these matters, to say that Wales extends to a certain point and then stops and then England starts. But there are areas on the Welsh side of the border that do not think of themselves as being as Welsh as Ceredigion, for example. Also, there are areas on the English side of the border which have a close affinity with Wales. When I am shopping in Chester, for example, I find an extraordinary amount of Welsh being spoken in the streets there.
Perhaps this betrays my basic lack of confidence in the Assembly as such, but I would rather rely on the sensibilities of a Minister, who is answerable to this place and is faced with both Welsh and English criticism, to balance the very delicate requirements needed to ensure that in dealing with such bodies as the two water authorities and the Waterways Board not only are the relevant needs of England and Wales properly considered,

but the subtle gradations which occur as one approaches the border on both sides are not needlessly offended.
This is the sort of area in which competition occurs not for votes but to win the headlines in the Welsh Press to earn the plaudits of one's constituents. This kind of motivation is particularly unhelpful in dealing with matters requiring a sensitive approach. It all depends on which Minister will be responsible in these matters. Some Ministers will show a great deal more sensitivity than others. I am sure that if the Minister of State, Privy Council Office, were in charge of these matters, he would show the utmost sensitivity.
I should like to take up a point made by the hon. Member for West Lothian (Mr. Dalyell), who seemed to imply that Ministers who were unfortunate enough to have to deal with the subject of devolution in the House would see their political career blasted—

It being Eleven o'clock, THE CHAIRMAN left the Chair to report Progress and ask leave to sit again, pursuant to Order [16th November].

Committee report Progress; to sit again tomorrow.

Orders of the Day — STATUTORY INSTRUMENTS, &c.

Motion made,
That the Order of the House of 17th March, that the draft Weights and Measures Act 1963 (Weighed-out Foodstuffs) (Restrictions on Imperial Units) Order 1978 be referred to a Standing Committee on Statutory Instruments, &amp;c., be discharged.—[Mr. Foot.]

11.2 p.m.

Mr. Robert Rhodes James: I rise not to oppose or object to the motion but to ask the Lord President of the Council, as he is present, to give some explanation to the House why the request is being made for the order to be discharged. I repeat that I am not objecting to the motion, but feel that the House is entitled to some explanation of the motion.

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): This is not, I understand, a debatable motion and I am not quite sure whether the hon. Gentleman is raising the matter on a point of order. As I understand it, the motion is in the


normal form, considering the fact that the order was before the House on 17th March. In view, however, of the way in which the hon. Gentleman has raised the matter, I am prepared to look into it and see that he has a further explanation if there is any departure from the normal form; but I do not believe that to be the case.

Mr. Rhodes James: Further to that point of order. I wish again to emphasise that I am not opposing the motion. All I was seeking was some explanation. If the right hon. Gentleman is prepared to state that the motion follows normal procedure, I shall be happy to accept it, but it seems a slightly unusual procedure when an order of the House is suddenly brought before the House in an application for discharge.

Mr. Deputy Speaker (Mr. Oscar Murton): Order. The hon. Gentleman has pursued a slightly unusual course. So far so good, but he should not take it to another point of order. He has heard what the Lord President of the Council has said. He must either accept what has been said or object, which is the alternative.

Mr. Rhodes James: On a point of order on that matter, Mr. Deputy Speaker. With great respect, that is not an alternative with which I and the House are faced. I have asked for some brief explanation of why the motion is being proposed, and surely that is a proper request to make. As I have tried to emphasise, I am not endeavouring to object to the motion but am asking for some explanation.

Mr. Deputy Speaker: The point is that it is not exempted business; it is not debatable. That is the difficulty the House faces, because it would be a breach of rules of order. The hon. Gentleman raised a point of order and the right hon. Gentleman gave him an assurance. If the hon. Gentleman is satisfied with it, well and good. If he is dissatisfied, the only alternative he has is to object.

Mr. Rhodes James: I do object.

Me. Deputy Speaker: Objection taken.

Orders of the Day — LEEDS (LOCAL AUTHORITY SERVICES)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jim Marshall.]

11.4 p.m.

Mr. Joseph Dean: I welcome this opportunity to bring to the attention of the House—

Sir Donald Kaberry: On a point of order, Mr. Deputy Speaker. I am sorry to raise a point of order in an Adjournment debate, because I know how precious the moments are, and I shall be as brief as I can.
I submit that the subject matter of this debate cannot be answered by a Minister in the House tonight. It is a bad issue on three grounds. "Erskine May", in the nineteenth edition, at pages 277, 362 and 371, clearly sets out why this discussion is not amenable to being answered by a Minister tonight. It is precluded by the rule of anticipation. It is made clear in "Erskine May" that discussion on the Adjournment should not take place on a subject which stands on the Order Paper. Item 21 on today's Order Paper is consideration of the Inner Urban Areas Bill on Report. It is clear from "Erskine May" that we cannot anticipate discussion in connection with inner urban area matters.
Secondly, the Minister has no general responsibility or administrative capacity or responsibility to answer for the internal matters of the Leeds City Council, which is a district council, properly established, more recently under the terms of the Local Government Act but, in fact, going back 350 years. The level of the services of the council is clearly delegated to the city council. It is answerable to its electorate, ratepayers and voters. The Minister cannot speak authoritatively on the level of the services being granted by the city council. If he wished to do so, amendment of the Local Government Act 1972 would be required, and the moment I mention that legislation is required on a matter to be raised in an Adjournment debate should be the end of the debate. The hon. Member for Leeds, West (Mr. Dean) cannot call for an amendment to the law.
Thirdly, if what I say is correct, the Minister has no responsibility to question the level of the services to be given by the Leeds City Council. That is a matter that should be answered by the leader of the council and he should come to the Dispatch Box to answer charges made against him by hon. Members on whether the services granted by the council are in order. But that, again, would require an amendment to the 1972 Act, and the minute that is made clear should be the end of the Adjournment debate, because no question of legislation can arise in such a debate.
I could develop the arguments but I shall not do so. I ask for your ruling, Mr. Deputy Speaker, as to whether this debate on the subject listed on the Order Paper can properly be answered by the Minister or dealt with at all without some amendment of the 1972 Act.

Mr. Deputy Speaker (Mr. Oscar Murton): I thank the hon. Member for Leeds, North-West (Sir D. Kaberry) for giving me notice of the points he has raised. I am sure he knows that applications for Adjournment debates are carefully considered by Mr. Speaker to ensure that they comply with the rules of the House. I am clear, therefore, that the subject that the hon. Member for Leeds, West (Mr. Dean) is raising is in order. It is, of course, true that the hon. Member may make only incidental reference to matters requiring a legislative remedy, but that point is covered under Standing Order No. 16. Mr. Joseph Dean—

Sir D. Kaberry: Further to that point of order, Mr. Deputy Speaker.

Mr. Dean: I am not prepared to give way. You have called me, Mr. Deputy Speaker, and this is my Adjournment debate.

Sir D. Kaberry: Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Sir Donald Kaberry, on a point of order—quickly, please.

Sir D. Kaberry: May I ask whether that ruling covers the rule of anticipation, because the Inner Urban Areas Bill is item 21 on the Order Paper today?

Mr. Deputy Speaker: It does.

Mr. Joseph Dean: I am sorry that such a distinguished Back Bencher as the hon. Member for Leeds, North-West (Sir D. Kaberry) should stoop to such a scurrilous tactic as he has just tried in order to attempt to gag someone. I remind him that his personal friend, the leader of the city council, took me to task when I was not present, so I see no difference in what is now taking place. I do not know whether the Standing Orders allow for an hon. Member to be given injury time, but, if so, I shall take full advantage of it and speak for as long as I wish.
The reason why I have asked for this debate is that it is apparent to anyone who knows Leeds that it has in certain areas as much inner city deprivation as other cities which have been included in full partnerships. I was one of those who expressed disappointment at the exclusion of Leeds from the partnership scheme, although it has been placed on the supplementary list.
I consider it my duty as a Member of Parliament representing that city to care for my electors and the standard of services they receive. It is my job to make sure that, if resources are being made available from the Government, the interests of my electors do not go by default. It is well known on the political scene that every time the Conservatives want to debate local government they cite the city of Leeds as a wonderful example of running services on the cheap. It was not so long ago that the Conservatives chose the city of Leeds as such an example in a Supply Day debate.
The Leader of the Opposition was featured on "Weekend World" some time ago and she paraded Leeds as a marvellous example. The leader of the city council, to whom the hon. Member for Leeds, North-West referred, was featured in a political broadcast. It would be interesting to know whether the fact that Leeds had been paraded in such a way as having done so well explains why it does not have an inner city partnership.
I tabled a series of Questions in an attempt to discover what has been happening. The answers do not confirm the picture that the Conservatives have painted. The Conservatives made a botch of local government reorganisation, but, in spite of that, the large single-unit authorities were left with considerable powers to care for their people. The main


services are housing and education. In the past, Leeds has had a tremendous history on housing. At one time it set the pattern nationally. Now, however, Leeds has a waiting list of 20,000 families.
The figures that were given in the replies to me also showed that, out of the six big authorities, Leeds in the last 10 years has gone from first to fifth position in house building. A city which is only two-thirds the size of Leeds has built 10,000 more houses than Leeds in the last 10 years. Why did Leeds not do the same? It had the same resources. There was never any capital cut-back on new housing even during the economic blizzard of the last two years.
A couple of weeks ago I asked an Oral Question urging the Minister, in view of the 20,000 families living in bad conditions in the city, to stop the sale of council houses there. My right hon. Friend said that he would look at the matter carefully. I pointed out then that, while council houses were being sold for about £5,000 each, it would cost over £70,000 each to replace them, in view of the way that housing is financed over a 60-year period.
It is worth considering the reaction of the leader of the council. In his budget speech he pointed out what a wonderful housing policy Leeds had. He said that 2,000 council houses had been sold and that the council was on its way towards the 3,000 figure with a target of 4,000. He claimed that the city was being saved £400,000 a year. But to replace those houses, which would be necessary if the council was to discharge its duties and rehouse people in decent conditions, would cost a minimum of £280 million over 60 years. Many of those funds will come from the Government, and I suggest that my right hon. Friend the Secretary of State should consider whether he should be allowing the city council to proceed with the sale.
The rest of the money must be made up by the ratepayers of Leeds and in increased rents. That is not a bright prospect for housing. I wonder whether the leader of the city council, who is a successful business man, would dispose of his own assets in that way. But it is nice to dispose of public assets, which have been funded by public money, in that way for electoral gain.
Let me turn now to the chairman of the housing committee in Leeds. In a fit of adolescent genius, he came out with the statement in the Press, when told that I had raised this question, that there was a difference of policy between the Tories and the Labour Party. He said that the Labour Party wanted everyone to live in a council house. Have you ever heard such tripe in your life, Mr. Deputy Speaker?
There has been no Government in the history of Great Britain who have done more to help the owner-occupier than the present Government. Three years ago they provided £500 million to bail out the building societies. When my hon. Friend the Under-Secretary replies, I hope that he will nail the lie once and for all. We are not against owner-occupiers. We believe in owner-occupation, but the private sector should cater for it. Where there is a shortage of rented accommodation, as there is to a great degree in cities such as Leeds, it should be dealt with, and it cannot be dealt with by the sale of council houses. Houses should be made available for those wo need them.
I turn to another important service. The information in the letter to which I have referred is a deliberate fraud. I do not think that Councillor Irwin Bellew—I refer to him by name as he took the liberty of naming me—is so unknowing about teaching that he could mention in his speech and see publication of figures that ar not remotely right.
Twelve months ago I had good fortune in the Ballot. I chose to talk about education in Leeds. I challenged some of the ministerial assumptions and ministerial criteria for judging what is termed the pupil-teacher ratio. I cited a primary school in my constituency—it is not one in isolation—where there were nearer to 40 children in each class than 30. What does Councillor Bellew say? He says that the pupil-teacher ratio in Leeds at present is 20–7.
I do not know whether the hon. Member for Leeds, North-West, who tried to stop me speaking, has 20 children in each class in his constituency, but I challenged the leader of the Leeds City Council to visit my constituency and find a pupil-teacher in class ratio of 20. I am talking about the number of pupils in a class per teacher and not the mystical figure that is arrived at by including everyone working


for the Leeds education authority who happens to have teaching qualifications.
When I visited a school in my constituency—I refer to the Parkspring School—the girl taking the new year intake said "Look at what I have to put up with here, Mr. Dean. There are 40 children starting in a class". That is the situation, yet the leader of the council has the infernal cheek to say in his speech that Leeds is better than Liverpool, Sheffield, Newcastle and Manchester. Only somebody so consumately arrogant or completely ignorant of the facts could dare to make such a statement.
It is slightly more difficult to deal with the social services. The figures are based on the financial year which has just ended. I cannot quote this year's figures as there are unknown quantities. I do not want to mislead the House into thinking that I am talking of figures that may be slightly altered upwards. However, there are equations that will alter. The leader of the Leeds City Council boasts about a 10 per cent. increase in spending per capita for every child at school. How does Leeds compare with six local authorities of comparable size? The authority spending the highest amount, which finds itself at the top of the list, was spending over £100 more per child at school compared with Leeds. The authority taking fifth place was spending about £40 more per child.
It is suggested by the leaders of the Leeds Council and the political machine that is now in situ that Leeds is doing a marvellous job, that it is doing better than any other authority and is spending less money. As a product of local government, I consider that to be a deliberate misleading statement of fact. It is a downright lie. No one in local government can tell us that such considerable sums can be saved by mere administration. It is suggested that the children in schools in my constituency, who are sharing classes with 35 to 40 others, are being as well taught by one girl as they would be in authorities in which the average number per class is down to the national average of 25? I do not believe that.
I have the utmost respect and regard for the teachers in my constituency and for the job they do, but I think that they get a rotten deal from the Leeds Council

in terms of the resources that are made available. That must be looked at. I hope that the Minister will get away from the nonsense of pupil-teacher ratios, because it gives reactionary authorities, such as the Conservative-controlled Leeds City Council, an excuse to hide behind a completely "phoney" formula.
I turn now to welfare services, which are a little more difficult to analyse. Nobody can accurately gauge the numbers of elderly or handicapped people authority by authority. My Question on that matter showed that, per head of population, Leeds was in sixth place. Has it happened by accident?
I asked myself who is to blame for this situation. I have my suspicions. I suspect that Leeds was not given an inner city partnership because of its appallingly low funding of its own services. I do not think that a Government of any colour dare pick up the lot for a city that boasts that it is paying 20p in the pound less rates than cities of similar size. When the Conservatives first took control of Leeds City Council they had £6 million to play with, but they did not put that money into services. They did not get rid of all the outdoor toilets about which they boasted in the letter, in about 40 Dickensian-type schools. They did not put it to use for that purpose. They paid it all back. Then, within two years, they expect the Government to pick up the bill for that kind of activity. Of course Governments make mistakes, but they do not make mistakes of that kind. The matter must therefore be looked at on that kind of basis.
I think that two people run the Leeds City Council, the leader of the council and his side-kick, Councillor Sparling. They seem to act like a political Tweedledum and Tweedledee.

Mr. Albert Roberts: I have been listening to my hon. Friend making these points, and I think that he is making them very well indeed. He is trying to prove the destitution that exists in the city of Leeds. I get sick and tired of hearing the Merseyside lament, the panderings to the Midlands and the crying-out of the North-East when the West Yorkshire area is completely neglected. These points have been well highlighted by my hon. Friend the Member for Leeds. West (Mr. Dean).

Mr. Dean: One has to ask who is to blame for this situation. Of course, the ready-made answer by Councillor Bellew is "It is this lousy Government. If they gave us more money, we would spend more money. They have cut our money from three years ago."
I was involved in local government five years ago, and the situation was so appallingly bad for the big cities under the Conservative Government that in 1973 the then leader of the Leeds City Council, Councillor Sir Albert King, was one of a deputation of six from the big cities who went to see the Conservative Prime Minister and exposed the sham of what was happening with regard to financial support from the Government. The formula was supposed to be 60 per cent. from the rate support grant and 40 per cent. from the rates. But, because of the criteria being used, Leeds, Manchester. Liverpool and other big cities were receiving 40 per cent. and having to find 60 per cent. The Prime Minister sent them away empty-handed. Now this man, the leader of the Leeds City Council, has the cheek to say that they are being unfairly treated by this Labour Government.
In 1974 the first action of this Labour Government, through the late Anthony Crosland, was to alter the situation in favour of these large cities by rate equalisation. To claim that the council has been done down and is not being treated fairly is completely "phoney". Leeds is getting a bigger percentage of its expenditure from this Government than it has ever had before. Therefore, that excuse will not wash.
One particular area in my constituency is as bad as any deprived area that I have seen anywhere. I have no doubt that other parts of Leeds, represented by other hon. Members, are as bad. But it may be that the hon. Member for Leeds. North-West is lucky in the patch that he represents. There is a reasonable increase in the Leeds budget figures for this year, perhaps, but that does not make up for the existing deficits.
What can be done about a situation like this to see that this deprivation ceases? What can be done about a city that cuts its building programme to 1,250 houses when it has a waiting list of about 20,000 and is disposing of council houses at the present rate? I hope that the

Minister will give me some reason for hope when he replies. I have aired the situation, and I should like to see him look with sympathy at the suggestion of making funds available. I am convinced that the way that the council in Leeds is operating, of fighting elections with rates as the sole issue and giving council houses away at knock-down prices, must be investigated, and dealt with by this Government.

11.26 p.m.

The Under-Secretary of State for the Environment (Mr. Guy Barnett): I must admit to having been a little surprised by the point of order that was raised at the beginning of the debate. I can never recall such a thing happening before in Adjournment debates. I was also mildly surprised not to have received any notice of the fact that such a point of order would be raised on the question of my competence to reply to the debate.
My hon. Friend the Member for Leeds, West (Mr. Dean) made a very interesting speech about the low provision of services by Leeds District Council. He is better placed than I am to comment on the level of services provided. The fact is that it would be impossible for us in the Department of the Environment to do a detailed breakdown across all local authorities of both the level of services they are providing and the cost of their doing so. Even if it were possible, it would probably not be right for us to try.
The range of differences between authorities on their size and composition, the needs they have to meet and the means they adopt for doing so rule this out. However, I understand that it is true that Leeds levies a comparatively low rate poundage and that ratepayers in Leeds meet a lower proportion of the authority's rate and grant-borne expenditure than the average for metropolitan districts. Tory-controlled, as it is, it is hardly surprising to find Tory philosophies about public expenditure being implemented in the city.
I am afraid that this is an area where, as a Minister in the Department of the Environment, I must tread carefully. It is up to Leeds City Council, as to every other local authority, to determine its own level of spending, and use of the resources available to it, in the light of local needs and circumstances. My hon.


Friend made a very good case on the basis of per capita expenditure of local authority services, but I hope that he will understand the reasons why I must refrain from commenting on what he said.
It is obviously difficult for me to assess whether the level of services provided by Leeds is markedly below that provided in other metropolitan districts. Total expenditure or expenditure per head of population is not necessarily a good indicator of the level of quality of services provided, as it does not take into account local needs or the different ways in which such needs may be met.
If the local electorate feel that the resulting provision is too low, I am sure that they will register their displeasure in due course at the ballot box. Certain duties are laid on local authorities and we in the Government set minimum levels of services or overall standards which local authorities are required to meet. Beyond that, I believe that it would be trespassing on the relationship between central and local government if we were to seek to indicate to them how they should spend their money.
I want to turn particularly to the subject for which we are directly responsible in the Department, and that is the level of Government grants. I want to answer the charges, to which my hon. Friend referred, that the central Government has not been fair to Leeds—that we have not taken adequate account of the needs of the city.
It is undeniable that central Government actions have an effect upon individual local authorities, in particular through rate support grant and through the annual distribution of the needs element.
I would never claim that the present regression system is perfect; it certainly is not. But it is the most objective and accurate method currently available. It ensures that, as far as possible, resources are concentrated in the areas of the country which face the most pressing social and economic problems.
On the basis of the latest figures available to us, we estimate that Leeds' final needs element entitlement will increase by some 6 per cent. to £62 million in 1978–79, so on that score I do not think

that the central Government can be held to have been ungenerous to Leeds according to the normal rate support grant system. I recognise that it is not a spectacular gain for the authority, but it is in fact better than the average for metropolitan authorities generally. So I do not think that Leeds can claim that it has been done down by the Government as far as rate support grant is concerned.
My hon. Friend has referred to housing. The facts are that the city council applied for a housing investment programme of £38 million for 1978–79. This was an increase of some £12 million compared with its allocation for 1977–78. When the allocations were made at the beginning of the year, it was possible to give Leeds £29·25 million. Leeds' cash allocation, therefore, equalled 69 per cent. of its bid—which exactly equals the average percentage for all local authorities in England.
I am glad that my hon. Friend also referred to the question of the sale of council houses. I should like to confirm absolutely that the present Government, so far from being against owner-occupation, are very strongly in favour of it. As my hon. Friend knows, we are concerned about some councils which appear to be selling council houses indiscriminately, disregarding local housing needs. I understand that Leeds has a total dwelling stock of 272,000 houses and that the council owns 36 per cent. of that total. My information is that in 1977 there were 19,500 families on the waiting list.
It is the general policy of my Department to advise local authorities to take a balanced view. I fully understand the feelings of people whose councils appear to be selling their housing stocks indiscriminately, and my hon. Friend has represented these feelings to us eloquently. My right hon. Friend the Minister for Housing and Construction told my hon. Friend last month that he would be ready to amend the general consent for council house sales if the circumstances warranted it. I am afraid that I cannot say any more about that now.
I want to turn briefly to the subject of education. Although this is, of course, not my own field of responsibility, I understand that provisional allocation for all building in Leeds in 1978–79 has just


been doubled and that the authority intends to use some of this money to build a replacement for a primary school whose cause, I know, has long been close to my hon. Friend's heart.
I wish that I had time to go into detail about the contribution that the Government have made towards inner city policy. I recognise the disappointment expressed by my hon. Friend that Leeds has not been selected as a partnership authority. Partnership authorities selected themselves, in effect, by the degree and concentration of the problems that they contain.
My hon. Friend knows, however, that, as a programme authority, the Leeds City Council can, in effect, expect a good deal of assistance from the central Government. I hope that we shall get from Leeds a recognition of the problems of deprivation that exist in that city matching

the priority that the Government are giving in urban aid grants to assist cities with problems of the kind that Leeds has.
Finally, I hope that my hon. Friend is persuaded that we have tried to treat Leeds as fairly as we can and not, as some have pretended, with injustice. We are anxious to see Leeds make the most of its inner area programme, and I know that my right hon. Friend the Minister for Housing and Construction is taking a special interest in that programme. We shall of course be willing to offer advice and assistance in whatever way we can.

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-six minutes to Twelve o'clock.